Energy giant: No price cuts in power plan

Scotland’s state-owned energy firm will not be able to undercut the big suppliers, industry leaders have claimed.

SNP ministers want to set up a cut-price power company to sell “competitively priced” gas and electricity to help the poorest and boost the economy.

But one of the UK’S biggest energy firms, SSE, has told the Scottish Government it is unclear how the new firm could offer “meaningful reductions” in a crowded field of 42 other suppliers.

In addition, SSE says, the £140 discount on utility bills offered to low income households might not be available to the new state-backed energy firm because it won’t have enough customers to qualify.

Government consultants have already warned there are “significant challenges” to setting up an energy firm.

Responding to a Holyrood inquiry into creating a publicly-owned energy firm, SSE Energy Services said: “It remains unclear how an energy company would have the capabilities to offer customers meaningful reductions in price.”

Scottishpower said increased competition in the market has led to an “increase in low margin tariffs” and added it was “increasingly challenging for new market players to operate at profit”.

Western Isles Council also raised doubts with its submission to the Scottish Government.

Scottish Conservative energy spokesman Alexander Burnett said: “The proposal doesn’t stand up to scrutiny.”

The Scottish Government said: “The business case is being commissioned and this will include detailed commercial, economic and financial analysis.”