Today, ScottishPower was forced to follow other energy providers and become one of the last major suppliers to announce new energy prices for domestic customers. The announcement is a direct result of continued increases to input costs of coal and wholesale gas.
Since February 2008 the wholesale cost of gas has risen by 65% - the volatility of the market being clearly demonstrated by a recent increase of 9% in one day. Coal, another key input cost for ScottishPower, has also risen 45 % in the same period.
From 1st September 2008, the average customer will see a Dual Fuel increase of 25%. Electricity prices will rise by an average of 9% across the UK and gas prices will rise by 34%.
Around 1.2 million ScottishPower customers - equivalent to almost one in four domestic customers – currently enjoy the protection of a fixed or capped price product. ScottishPower was one of the first companies to introduce these products and today announced a new fixed priced product guaranteeing prices til December 2009.
Following the increase, ScottishPower will still be cheaper for combined Gas and Electricity than British Gas/ Scottish Gas.
ScottishPower also announced its plan to spend £40 million on measures to protect vulnerable customers in the next three years. The plan includes an initial package of £10m which will be spent in the next seven months helping households across the UK.
Willie MacDiarmid, ScottishPower’s Director of Energy Retail, said:
“These are difficult times and we understand the financial impact this announcement will have on our customers. Although we’re one of the last companies to announce increases we’re sorry we couldn’t hold on any longer. However we have worked very hard to protect people for as long as possible from these considerable increases in the wholesale market.
“We have tried hard to keep electricity prices as low as possible and our increase of 9% is the lowest in the sector. The continuing volatility in the global market for gas is directly contributing to increasing UK’s domestic energy prices and ScottishPower is not immune to these rises.
“ScottishPower remains one of only two suppliers to hold standard prepayment annual bills for both gas and electricity below those for customers on standard quarterly prices. This benefits 640,000 of the UK’s most vulnerable customers by an estimated £14 million per year”.
Through its ScottishPower businesses, Iberdrola will invest £2.8 billion in the UK between 2008 and 2010. Based on the company’s latest results this means every £1 of profit is being re-invested into new projects in the UK.
Notes to Editors:
An average customer’s bill has been defined as;
Gas: Based on an average ScottishPower domestic gas bill across Britain for a domestic customer who uses 20,500kWh of mains gas each year. Electricity: Based on an average ScottishPower domestic electricity bill across Britain for a domestic customer who uses 3,300kWh of Standard Rate electricity each year. Dual Fuel: Based on an average ScottishPower Dual Fuel domestic bill across Britain for a domestic customer who uses 20,500kWh of mains gas and 3,300kWh of Standard Rate electricity each year.
Unless otherwise indicated;
All prices correct as at 1st September 2008.
All figures shown include VAT at the current applicable rate of 5%.
1. Wholesale & Input Cost Increases
| ||Feb 2007|| Feb 2008|| Aug 2008||Increase Feb 07 to Aug 08||Increase Feb 08 to Aug 08|
Sources: ^Heren Index, *Tradition Financial Services, VAT not applicable
2. Average Annual Bills
|BRITAIN ||Was||Will Be|| Increase|
|Electricity ||£406||£444||£38 (9%)|
|Dual Fuel|| £1,040||£1,299||£259 (25%)|
Increases are averaged across Britain. Actual increase will vary by region and payment method.
3. New Fixed Price Package
These prices are higher than ScottishPower’s current monthly Direct Debit prices by an equivalent of £1 (inc VAT) for gas per month and £1 (inc VAT) for electricity per month. Separate terms and conditions apply.
4. Energy People Trust
ScottishPower introduced a charitable Trust fund in November 2005. The objective of the charitable Trust fund is to help combat fuel poverty by providing funds to not for profit organisations and groups that work directly with those in fuel poverty. As well as crisis funding, the Trust invites funding applications for research, energy efficiency improvements and income maximisation projects. The key focus of the Trust is projects, which target families with children and young people, with future scope to include other vulnerable groups such as disabled/older people. To date, ScottishPower has donated £4 million to the Trust and eleven funding rounds have seen the Trust award over £3.8m to 90 not-for-profit organisations assisting over 91,000 households and 221,000 individuals across Britain. For more information visit www.energypeopletrust.co.uk.
Media information – Simon McMillan 0141 566 4875/ 07753 622 257