Scottishpower customers set to save from cap

● Utility bills of 11 million people set to be slashed with implementation

Scottishpower customers are to benefit most from a new energy price cap which the regulator says will slash the utility bills of 11 million people Uk-wide.

Householders who do not shop around for their energy supplier will save an average of £75 a year following the introduction of the cap by Ofgem which will see energy costs capped at £1,136 a year.

The cap will force suppliers to cut prices to that level or below, meaning that people who pay the most for their energy will see a reduction in their bills. Scottishpower direct debit customers on default deals will save the most at £121 per year.

However, consumer groups have warned that the decision is the “wrong message, at the worst possible time”, warning that the cap could make consumers

0 Householders who do not shop around for their energy supplier will save an average of £75 a year

complacent and deter themfromswitchingprovider.

Since April, Scottish Gas owner British Gas has raised its price twice – adding a total £104 to the average bill. Other energy companies have also

hiked prices between 4 and 9 per cent, with Scottishpower announcing last month that dual customers will pay 3.7 per cent more from October.

Georgie Frost, consumer advocate at Gocompare Energy,

said: “Today’s announcement sends the wrong message, at the worst possible time. We are about to go into winter – the season of the biggest energy bills – after a period of unprecedented energy price rises and with 11 million households still sitting on expensive standard variable tariffs.

“It’s good that the government have energy firms and bills within their sights, but it is important to remember that this is only temporary, it’s a sticking plaster.”

The regulator, which was given legal powers by the government in July to introduce the cap, hopes to have the measures in place by the end of the year.

Dermot Nolan, chief executive of Ofgem, said: “Once the price cap is in place, all households in Great Britain covered by the cap will be protected from being overcharged for their energy. Consumers can have confidence that falls in energy costs will be passed on to them and if costs increase, Ofgem will ensure that any rise will be due to genuine increases in energy costs rather than supplier profiteering.”

Paul Earl, head of energy at Comparethemarket.com, said: “There is concern that the price cap will make energy more expensive. More than half of UK adults think the average cost of energy will increase post price cap, as energy companies raise the prices of their best value tariffs in order to offset the impact of the price cap.”