Scottish Power Pie Chart 2013

ScottishPower’s 8.6% price hike is a relief – well it would be, wouldn’t it!

The day after Npower beat the government into submission with a record-breaking 10.9% price hike, ScottishPower eases the pressure down to a modest 8.6%. Well they would do wouldn’t they? Npower‘s shock-and-awe attack had already won the Big Six campaign. Any more would only add insult to injury and risk drawing attention to the £8.5m ScottishPower were ‘fined’ the day before yesterday for what many might call fraud and deception.

The mainstream media aren’t objecting, they have much bigger fish to fry. Gorgeous George is getting christened. Portuguese police are still looking for Maddie. Angela Merkel’s mobile phone was bugged. A quarter of hospitals are at raised risk of providing poor care. Unions are “embracing” reduced wages, pensions and working conditions in an effort to persuade a multi-billionaire global oligarch and owner of two super yachts to let Grangemouth oil refinery workers keep their jobs. And Jimmy Savile’s chauffeur is arrested again in yet another pensioner sex probe.

In contrast to the mounting feeling of panic that goes with trying to swim through progressively thicker layers of treacle piecing together the data from the previous three price hikes, Scottish Power‘s press release is as crystal clear and calming as a Highland mountain stream, supplying all the data we need on just a single web page.

ScottishPower break down the costs of a typical £100 dual fuel bill in exactly the same categories as the previous three, making them as easy as pie (excuse the pun!) to compare:

Scottish Power Bill Breakdown
Scottish Power: Cost breakdown per £100 of typical dual fuel bill
Sc.Pwr Npwr2 Npwr1 Br.Gas SSE Ofgem En.UK
Wholesale Energy 50.00 43.20 42.00 47.81 52.00 46.00 47.00
Network Delivery 21.00 23.20 24.10 23.82 24.00 23.00 20.00
Operating inc Metering 10.00 12.50 23.60 8.75 6.00 13.00
Social & Environmental 10.00 11.40 5.00 9.43 8.00 9.00
Investment 10.00
Profit 4.00 4.70 0.40 4.13 5.00 5.00
Taxes 5.00 5.00 4.80 6.06 5.00 5.00
Total 100.00 100.00 99.90 100.00 100.00 101.00 77.00

There’s nothing here we haven’t seen already. So far, ScottishPower is looking about average in every respect. So how much have the costs in each of the various sectors gone up?

Scottish Power blames exactly the same three causes as Npower, British Gas and SSE:

The average annual dual fuel bill for a customer will increase by £113. This is primarily driven by:

  • 7% increase in the costs of the gas and electricity purchased on wholesale markets
  • 11%[3] increase in the costs of delivering gas and electricity to our customers’ homes
  • 16%[4] increase in the costs of compulsory environmental and social schemes

Comparing those increases with the other companies, nothing noticeable stands out. Scottish Power has the highest increase in wholesale prices, but no higher than British Gas, and the second lowest increase in Social & Environmental levies after SSE:

Sc.Pwr Npwr2 Npwr1 Br.Gas SSE
Wholesale Energy 7 3 3 7 4
Network Delivery 11 10 10 7 10
Social & Environmental 16 31 31 38 13
Profit 0 6 1,150 0 0

Feeding those increases into the cost breakdown gives us this:

£ Current % Increase £ Increase
Total Announced £100.00 8.68% £8.68
Wholesale Energy £50.00 7% £3.50
Network Delivery £21.00 11% £2.31
Social & Environmental £10.00 16% £1.60
Total ex VAT £7.41
VAT @ 5% £0.37
Total inc VAT £7.78
Not Accounted For £0.90
Overcharged 12%

So it seems that Scottish Power is marking up it’s cost increases by 12%, which is also pretty near the average of the price hikes we’ve seen to date:

Sc.Pwr Npwr2 Npwr1 Br.Gas SSE
Total Announced £8.68 £10.40 £10.40 £9.20 £8.20
Wholesale Energy £3.50 £1.30 £1.26 £3.35 £2.08
Network Delivery £2.31 £2.32 £2.41 £1.67 £2.40
Social & Environmental £1.60 £3.53 £1.55 £3.58 £1.04
Profit £0.30 £4.60
Total ex VAT £7.41 £7.45 £9.82 £8.60 £5.52
VAT @ 5% £0.37 £0.37 £0.49 £0.43 £0.28
Total inc VAT £7.78 £7.82 £10.31 £9.03 £5.80
Not Accounted For £0.90 £2.58 £0.09 £0.17 £2.40
Overcharged 12% 33% 1% 2% 41%

So, all-in-all, there’s not much to see here. Nothing to be concerned about. Just keep your heads down and move along please.

But there is one thing we’re still curious about. The increase in the average annual dual fuel bill of £113, which ScottishPower is so keen to point out, is only one pound more than the £112 of what David Cameron called green “taxes” yesterday, which he said we needed to have an honest discussion about:

But yes, we also need to roll back the green charges that he put in place as energy secretary.

We have to have an honest discussion about this. On our energy bills is £112 of green taxes and green regulations.

And it’s only three pounds more than the £110 that SSE‘s chief executive, Alistair Phillips-Davies, said that energy bills would fall by overnight if the levies were axed.

Is that jut a coincidence do you think, or have they all been reading the same script?

The answer to that is pretty obvious, depending on what side of the fence you’re on. If you’re the kind of free-market fundamentalist who believes people exist to service the economy, that markets must come first and there is no alternative, then what Cameron and The Big Six are saying makes perfect sense.

If, on the other hand, you think that the markets and the economy only exist to service people, not the other way around, then what they are saying makes no sense at all.

You pays your money and you takes your choice, as they used to say. If there is no alternative there can be no choice, but you pays your money anyway!

Only that old Labour war horse, The Mirror (more of an old nag these days unfortunately thanks to Robert Maxwell and Piers Morgan) put the ScottishPower price hike into its true perspective with the headline:

Energy Bills: Scottish Power raises prices by NINE PER CENT days after £8.5m mis-selling penalty

Scottish Power blamed the hike on the costs of the Government’s green energy measures. Spokesman Neil Clitheroe said: “We unfortunately have no other option than to pass these on by increasing our prices for customers.”

But the hike by the Spanish-owned firm came days after Scottish Power agreed to pay £8.5million to customers affected by mis-selling by agents between 2009 and 2012.

At the bottom they say this:

Does Scottish Energy’s excuse ring true to you, or is it political opportunisim? Have your say bel;ow (sic)

“opportunisim”? “bel;ow”?

Really? Is there anyone left at the Mirror who knows how to spell?

Nobody seems to have left a comment on the Mirror, which is hard to understand, but you can do it here if you like!

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