Ministers are demanding answers from Scottish Power about last week’s price hike
Monday, 13 June 2011 05:01
John Swinney has asked for an urgent meeting with Scottish Power to hear why they think their price increases are justified.
The Finance Secretary has also urged energy regulator Ofgem to accelerate action to protect vulnerable customers and make the energy market more transparent.
If the price increases were replicated by the other suppliers, up to 169,000 more households would be placed into fuel poverty.
Mr Swinney said:
“I am deeply concerned at the scale of Scottish Power’s price increases and I am seeking an urgent meeting to hear why they think increases of this scale are justified.
“Any fuel price rises have an impact, yet these increases will leave many households, in particular vulnerable consumers, in real, real difficulty. If these increases were replicated by the other suppliers, we estimate over 900,000 households would be in fuel poverty in energy-rich Scotland. That is an utter disgrace and simply underlines the urgent need for Scotland to secure responsibility for its own North Sea oil and gas resources, securing billions of pounds of revenue, which would allow us to help offset the worst effects of these price hikes on the poorest households and provide a sustainable and lasting benefit for this country.
“Price rises on this scale also undermine the progress we have made in boosting energy efficiency and tackling fuel poverty. Our Home Insulation Schemes have visited over one in five of Scotland’s homes, and our range of energy assistance packages have now helped over 200,000 people on low incomes reduce their energy bills. Our new Warm Homes Fund will build on this success and further reduce energy bills and protect vulnerable households by providing renewable energy for people on low incomes.
“Price hikes like this also underline the importance of the actions we have taken to protect household incomes through continuing to freeze the council tax for the rest of this Parliament and scrapping prescription charges.
“Yet the Scottish Government can only do so much with the powers we currently have. I have asked Ofgem for an urgent update on their actions to address unacceptable price rises by power companies and to further protect consumers.
“I urge Ofgem to press ahead with Retail Market Review and radically simplify tariff structures and make it easier for consumers to compare prices. I am asking Ofgem to consider compulsory tariffs for the fuel poor and ways of ensuring companies pay more into schemes to protect the fuel poor. And many people feel that power companies are quick to pass on wholesale prices rise but not cut bills as quickly when they fall. Ofgem are investigating this and I have asked them to do this urgently.
“These latest price shocks yet again underline why it is vital to go faster and further to secure our future as a green energy powerhouse and source all of our electricity needs from renewables by 2020, creating a secure, diverse future energy mix.”
An innovative electricity deal negotiated by the Scottish Government for the whole of the public sector is already saving taxpayers £10 million of pounds a year through bulk buying and reducing electricity demand