ScottishPower: under new management and new prices
The price cuts will come in the week that the new Spanish owner - Iberdrola - takes full management control.
The new chief executive of ScottishPower, Jos Luis del Valle, flies into Glasgow on Sunday, ready to start his new job on Monday morning. Company sources said yesterday that pricing policy would be at the top of his agenda.
The cuts may well have been announced by the time Iberdrola's chairman, Ignacio Galn, arrives in Glasgow on Wednesday. Galn intends to visit all of ScottishPower's installations and offices.
"I want to meet everybody and visit everything," he told The Scotsman yesterday. He would not be drawn on details of the company's pricing strategy, saying he and the chief executive needed to familiarise themselves more fully with Scottish and British market conditions.
But he made it clear he had every intention of competing hard for customers. "We believe, I believe, in competition," he said.
The Spaniards have been embarrassed this week by ScottishPower being criticised by Ofgem, the industry regulator, for failing to cut its prices as swiftly as its competitors. Pressure on the company was increased yesterday when British Gas announced it was cutting its gas and electricity prices.
Iberdrola's executives, meeting in Valencia yesterday, admitted privately that their attention had been focused elsewhere this week - on the announcement of the company's first quarter results yesterday, and on a series of planning meetings with ScottishPower's top managers, who are also in Valencia.
The meetings are aimed at drawing up a strategic operating plan for the combined company by 30 September.
Galn told a news conference: "We agreed that the management team will be untouched under the leadership of Mr del Valle."
He added that it had been decided to centralise investment and borrowing operations and communications functions in Madrid. Executives stressed later that this was not a job-cutting exercise; rather it was about centralising decision-making and ensuring there was a single line of reporting to executives in Madrid.
Iberdrola's net profits for the first quarter of 2007 rose to 458.2 million (312.9m), an increase of 13.6 per cent compared with the first quarter of 2006. Gross operating profit was up 2.9 per cent to 1.09 billion.