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UPDATE 1-Iberdrola's ScottishPower joins in British energy price hikes
October 24, 2013 / 2:34 PM / 4 years ago

UPDATE 1-Iberdrola's ScottishPower joins in British energy price hikes

* Latest of “big six” power firms to hike prices

* Blames regulatory costs

* Power price rises hot topic ahead of election next year

By Sarah Young

LONDON, Oct 24 (Reuters) - British energy supplier ScottishPower, owned by Spanish utility Iberdrola, said it would raise its household charges for gas and electricity by an inflation-busting 8.6 percent, the latest company to do so as a political row intensifies.

Energy costs have shot to the top of the political agenda in Britain since the opposition Labour Party promised to freeze bills for 20 months if it won the next election in 2015 and after several energy firms unveiled sharp price increases.

ScottishPower, like three competitors who have already raised prices, blamed increasing costs, singling out the burden of adhering to government social and environmental policies. Iberdrola on Wednesday also cited regulatory issues when it warned its profit would fall this year.

British Prime Minister David Cameron, under pressure to regain the initiative in the energy debate, said on Wednesday he would cut the green taxes which have inflated prices, although he is yet to give details of his plan.

RWE npower, Centrica and SSE have already raised their charges, leaving EDF Energy and E.ON the only two of Britain’s “big six” energy suppliers yet to do so.

Analysts say all the companies face the same rise in costs from government policies, climbing wholesale prices as well as a jump in the cost of using transmission systems, and expect the remaining two providers to follow suit.

Energy prices in Britain have already risen by 24 percent over the last four years, according to regulator Ofgem, ramping up pressure on household finances at a time of wage stagnation, and prompting Labour Party leader Ed Miliband to make his price freeze pledge.

British lawmakers will next Tuesday quiz energy company bosses, including ScottishPower’s chief executive of retail and generation Neil Clitheroe, over the big rises in household gas and electricity prices.

ScottishPower’s average price hike of 8.6 percent, more than three times the rate of inflation, was lower than npower and Centrica’s increases of 10.4 percent and 9.2 percent respectively but above SSE’s 8.2 percent rise.

Energy Secretary Ed Davey said in a statement that consumers should shop around for competitive deals, highlighting that there are 15 independent energy suppliers outside the big six, which supply more than 90 percent of households in Britain.

The extra charges will add 113 pounds to the average bill of customers receiving both gas and electricity from ScottishPower, ScottishPower said.

Separately, the company was fined 8.5 million pounds earlier in the week for mis-selling energy packages.

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