Windfall for energy giant ... days af ter it hikes bills
SCOTTISH Power has admitted pocketing a £120million windfall from the Beast from the East – days after claiming it had no choice but to hit customers with inflation-busting price rises.
The Arctic blast at the end of February and start of March left the country shivering in unusually cold temperatures, triggering extra demand for household gas and electricity.
The conditions also proved ideal for the Spanish-owned power giant’s wind turbines.
Yesterday, Scottish Power announced its pre-tax revenues for the first three months of 2018 rocketed by £119million compared with the previous year.
The sharpest rise was enjoyed by its supply arm, which delivers fuel to nearly three million British homes.
Its income soared 247 per cent to £131.7million.
Yet only last Friday the company said that domestic bills for a third of its customers would have to rise 5.5 per cent because 2017’s weather had been too warm, and to cover green energy and smart meter overheads.
Last night, critics said the latest data suggests the tariff increases – amounting to an average of £63 per household – are unjustified. Lily Green, digital campaigner for auto-switching service Look After My Bills, said: ‘Customers will rightly be asking why the price rise was necessary, given the profits that have fallen into the company’s lap.’
Citizens Advice Scotland spokesman Emma Grant McColm said: ‘Customers who have just been hit with another steep increase in their bills may well wonder why Scottish Power’s profits are continuing to rise like this. It seems inherently unfair.’
Scottish Power – owned by the utility conglomerate Iberdrola but based in Glasgow – claimed the latest figures represent only a return to normal levels of profitability and are still short of 2016 levels.
It said that the Beast from the East had caused a spike in demand for gas, mainly from power stations which used it to generate extra electricity for homes and businesses.
But the Arctic spell also brought continual steady winds, instead of the usual conveyor belt of Atlantic winter storms from the west. A Scottish Power statement said: ‘Increased wind volumes, reflecting both favourable wind conditions and increased capacity, saw an increase of 22.7 per cent [in renewable electricity] on the same period last year.’
revenue from the sector rose 29 per cent between January and March to £127.7million compared to the previous year.
However, chief executive Keith Anderson warned last night the massive windfalls would not necessarily lead to smaller bills in future for customers.
He said: ‘The improvement in generation and supply follows a very difficult 2017, which delivered one of the weakest performances for the business in the last decade.
‘The first three months of the year have seen the business recover to a level just below the first quarter in 2016.
‘Inherently unfair’
‘One of weakest performances’
With the [Government’s] price cap [on domestic bills] pending this year, we still expect a challenging environment for the retail business in 2018.’
Scottish Power lost 200,000 customers last year as more consumers switched from the Big Six. The latest statistics show it has haemorrhaged a further 100,000 accounts since the New Year.
Scottish Power’s bill hikes for those on variable price plans followed similar controversial rises from British Gas and EDF Energy.