Scottish Power will increase its standard variable domestic gas and electricity prices from 1 June 2018. The majority of customers affected, who pay by monthly direct debit, will see an average increase of 5.5%, or £63, on a typical annual dual fuel bill.
This price increase will affect approximately one-third of homes supplied by Scottish Power (approximately 960,000). The other two-thirds of homes are on tariffs or payment methods unaffected by this price change.
Neil Clitheroe, Scottish Power’s head of retail said the price change follows rising wholesale energy costs and compulsory non-energy costs, such as delivering low-carbon electricity and upgrading meters. These are similar to the cost pressures that led to OFGEM announcing a 5.5% increase to the prepayment safeguard tariff cap in February.
These latest Big Six price hikes come as latest industry figures show that almost half a million customers switched energy supplier last month.
The figures from Energy UK show that 474,235 customers switched electricity supplier in March.
This means that just under 1.3 million customers have switched in total during the first three months of the year. In 2017 a record 5.5 million – or 1 in 6 – electricity customers switched provider.
The figures show small and mid-tier suppliers continuing to make gains with a quarter of total switches in March being from larger suppliers to other providers.
Lawrence Slade, chief executive of Energy UK commented: “Finding a better deal can save customers a lot of money. Either checking with your existing supplier – or seeing what’s on offer from over 60 suppliers on the market – is well worth the effort. And with the Energy Switch Guarantee in place, consumers can be sure that the process will be simple, speedy and safe.”
Omar Rahim, chief executive of AI energy company Energi Mine commented: “In our current system energy companies are incentivised to sell more energy at the highest possible price, at the expense of the consumer.
“Without decisive government legislation, we’re seeing an emerging trend that the only way to save money on energy is to move away from the Big Six.
“We need to move to an ecosystem where consumers are given the power. The technology is there to match customers with smaller providers and facilitate a P2P system of power distribution. The traditional model of large, centralised power stations generating the vast majority of the UK’s electricity will in coming decades become a relic.”
As with the Scottish-British Gas and EDF price hikes, Scottish Power’s announcement was met with a hail of critical comments from consumer and fuel-poverty groups alike. Both British Gas and EDF unveiled price hikes last week, raising their standard variable rates by 5.5% and 1.4% respectively.
This series of announcements means a total 6.35 million households have been saddled with price rises in the new financial year.
Victoria Arrington, a spokeswoman for Energyhelpline, said Scottish Power’s price rise was the most substantial announced so far from the energy sector.
“The energy price rise wave is full on at this point – the majority of the Big Six have now announced price rises happening within the coming weeks,” she said.
Kate Morrison, the energy spokesman for Citizens Advice Scotland, added: “Yet again consumers will find these increases hard to take. A quarter of Scots are in fuel poverty, and the Citizens Advice network sees people every day who are already struggling to pay their bills.
“We also know that households which rely on electric heating, of which there are 282,000 in Scotland, are highly vulnerable to fuel poverty and have been particularly hard hit by recent price rises. A high proportion of these households are Scottish Power customers.
“We encourage people to regularly compare suppliers and consider switching to a cheaper option, which is much simpler than people often think. But we also want to see a fairer energy market. The energy companies need to put consumer interests at the heart of their business, and if they fail to do this governments and regulators need to be ready to act.”
And Alex Neill, head of home products and services at the consumer body Which? said: ‘This price hike is a kick in the teeth for hard-pressed energy customers, who sadly won’t be surprised at another big price rise from another big energy company.
“We would urge all Scottish Power customers not to just accept this rise, they should compare and switch now as they could potentially save up to £398 a year.”
23 Apr 2018