October 3, 2006
U.K.
U.K.
The energy giant ScottishPower yesterday said it was on track to announce record profits, as its customers continue to struggle with their bills.
City analysts said the company was on course to make a £850 million profit this financial year, compared with £675 million last year.
Making an announcement ahead of the interim results for the last six months due out in November, the Glasgow-based group said good growth at its US-based wind-farm business, PPM Energy, and at its wholesale and retail energy arms had raised its hopes.
But the consumers’ watchdog Energywatch said it doubted whether the company’s 5.3 million customers, about two million of them Scottish, would feel the same.
“I just wish this good news could be shared among the many thousands of homes across Scotland that will be struggling to pay soaring fuel bills this year,” an Energywatch spokesman said.
“You will have to make a decision whether to put food on the table or stay warm this winter,” the spokesman said. “Many people will be faced with a tough decision this winter.
“For every 1 per cent increase in bills, thousands of Scottish homes are going into fuel poverty.”
A ScottishPower spokesman refused to comment on whether retail prices would go up still further – despite recent falls in wholesale gas prices.
“We are currently keeping prices situation under review,” he said.
“At current prices we are losing money on gas customers at a rate of probably £100 per head per year.”
He added: “The recent retail price increases have begun to offset the continuing cost pressures from high wholesale commodity prices as our forward contracts unwind.”
Phyllis Herriot, an 80-year-old pensioner from Edinburgh, said it was a disgrace for energy companies to make massive profits at the expense of the elderly.
“The whole set-up is a disgrace. Big companies are making such profits and they are still charging elderly people, people with disabilities and families with children.
“Thank God we had such a good summer and autumn, which helped us a lot.
“I pay a good few hundred pounds on both electricity and gas each winter. You’re dreading the bill whenever it’s coming,” she said.
Since January 2003, wholesale gas and electricity prices have increased by 190 per cent and 160 per cent respectively compared with an increase in ScottishPower’s retail prices over the same period of 90 per cent for gas and 50 per cent for electricity.
The company increased its prices in March this year when gas bills rose by 15 per cent and electricity by 8 per cent.
It insisted that it had been forced to pass on the increases to customers after seeing wholesale costs jump by 80 per cent.
The spokesman said profit growth in the first half at PPM has been driven by a full six-month contribution from windfarm developments, and by its gas storage and energy management operations.
By Aura Sabadus
URL to article: https://www.wind-watch.org/news/2006/10/03/power-giants-record-profits/