The retail arm of ScottishPower, which provides gasoline and electrical energy to 4.8 million households, plunged to a loss within the first quarter of this yr as the corporate was pressured to soak up the price of surging wholesale costs not but handed on to its clients.
Earnings on the retail enterprise fell £12 million into the pink, down from a revenue of £106m in the identical interval a yr earlier, as the value it pays for gasoline on the worldwide market soared to report ranges. These prices solely started to be mirrored in customers’ payments from the start of this month after regulator Ofgem raised its worth cap by £693 per yr for the common UK family.
The vitality worth cap is supposed to make sure that customers should not charged unfairly. It’s reviewed each six months, after which suppliers are allowed to lift costs to cowl any enhance of their prices.
READ MORE: Glasgow-based ScottishPower sees buyer numbers fall
Some 30 UK suppliers have gone bust since August when gasoline costs started surging together with elevated demand as the worldwide economic system started its restoration from the pandemic.
The renewables division of Glasgow-based ScottishPower fared higher, with quarterly earnings up 20% on the identical interval a yr earlier at £250m.
About 40% of the £41m enchancment was attributed to elevated manufacturing, with climate circumstances favouring ScottishPower’s wind farms. The remaining was the results of increased vitality market costs.
ScottishPower, which is owned by Spain’s Iberdrola, made complete earnings of £497m throughout the three months to the top of March, down by £62m or 11% on the identical interval a yr earlier. This included a £250m contribution from its vitality transmission division.