Business

Scottish Power to raise gas and electricity prices

  • 15 October 2012
  • From the section Business
Oven
Four out of six of the major energy companies have announced price rises

Scottish Power has become the latest energy company to announce a price rise, with gas and electricity bills going up by 7% on 3 December.

The firm has 2.3 million customers and the average annual dual fuel bill will increase to £1,271.

The rise, blamed on increased costs, comes just days after British Gas and Npower said they were raising prices.

A 9% price rise by SSE - which trades as Scottish Hydro, Swalec and Southern Electric - has just come into effect.

Consumer groups have often argued that energy firms raise prices in packs.

'Difficult time'

The company said it had to increase prices for customers because the cost of transporting gas and electricity to customers' homes, and of energy efficiency programmes, had risen.

"We work hard to protect our customers and we regret that we have had to announce a price increase," said Neil Clitheroe, chief executive of retail and generation at Scottish Power.

"We will be writing to all those affected customers over the coming weeks explaining what the price increase will mean for them.

"We understand that this is a difficult time for many people and we encourage our customers to contact us."

The company announced a 5% gas price cut in February. The latest changes mean that direct debit customers will see a gas and electricity price increase of 8.7%. Those who pay by cash and cheque every quarter will see prices rise by 1.4%.

Meanwhile, those on prepayment meters, which are often those with financial difficulties, will see a price rise of 8.6%. However, these meters have greater running costs for energy firms.

Ann Robinson, of price comparison website Uswitch said some customers could ration their energy usage as a result.

"[This] move will be no surprise, but consumers will be disappointed and angry that these increases will be hitting them in the winter when the blow will be felt hardest," she said.

Other price rises

The reasons for the price rise echoed the views last week of British Gas managing director Phil Bentley, who claimed that 85% of the price it charged to customers was outside its control.

British Gas, the UK's biggest energy supplier, announced that it would raise its charges for both types of fuel by an average of 6% on 16 November. This will add £80 a year to the average dual fuel bill.

Meanwhile, Npower will increase the price of gas by an average of 8.8% and electricity by 9.1% from 26 November.

Adam Scorer, of watchdog Consumer Focus, said: "The volley of price hikes all coming in during the winter period will fuel consumer concerns about the energy market.

"Every time this happens it makes it difficult for consumers to believe that price rises are driven by real supply and demand issues. It feels as if companies raise prices in a pack because they see safety in numbers.

"This does not mean that wholesale price pressures are not real. But when half the market raises prices in just four days, consumers will question whether this is in response to volatile commodity costs or simply pack behaviour."

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