SCOTTISH Power has seen the profits of its household energy supply arm fall 60 per cent after losing 120,000 customers in the last year.

However, insisting Scottish Power played fair by customers of the retail arm, chief corporate officer Keith Anderson hammered home his opposition to the Government’s proposed cap on energy prices.

“In Retail, we have more customers on fairer deals than any other Big Six suppliers and we are the only bigger company to have increased its market share since 2011,” said Mr Anderson.

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He was commenting after Spanish-owned Scottish Power revealed profits from the supply of electricity and gas to UK consumers fell to £59.4 million in the first nine months, from £152.3m in the same period last time.

The company had around 5.22 million customers at 30 September against 5.34m at the same point last year.

Demand for electricity and gas fell by around seven per cent due to the relative mildness of the weather.

With profits falling much faster the results indicate Scottish Power has paid a high price for losing customers.

It may be feeling the effect of attempts by growing numbers of independent energy firms to win business from giants amid Government claims the energy market is failing consumers.

Last month the Government published draft legislation to introduce a price cap on energy tariffs saying it would act to fix markets them when they were broken.

The regulator Ofgem will bring in a cap on what are deemed poor value standard variable or other default tariffs under a bill that is expected to help more than 18 million customer accounts in Great Britain.

The Competition and Markets Authority (CMA) found previously that customers of the Big Six on standard variable and default tariffs, rather than fixed rate deals, are paying £1.4 billion a year more than they need to.

However, Mr Anderson reiterated his criticism of plans for a price cap. He said the proposed measure would be bad for consumers, energy companies big and small, and investor confidence.

Mr Anderson thinks a price cap is likely to stop consumers shopping around for the best deal.

Scottish Power has said it has worked hard to get most of its customers on to fixed price deals.

“The key question the Government needs to answer is whether they still believe customers benefit most from free market competition,” noted Mr Anderson. “If they do, any intervention must be designed to increase consumer engagement, which is the biggest thing wrong in this sector. Otherwise, we would urge the Government to opt for a fully regulated market. We need clarity.”

Mr Anderson said Scottish Power continued to invest heavily to deliver a clean, reliable and fairer electricity system despite continued political uncertainty.

It completed a £650 million programme to build eight onshore windfarms in Scotland in the latest quarter.

Scottish Power renewables grew earnings before interest, tax, depreciation and amortisation by 35 per cent in the first nine months, to £211.6m from £157m.

Onshore wind power increased 37 per cent annually in the third quarter.

The company is investing £660 million in its transmission and distribution networks in 2017.

The division made £567.2m profit in the first nine months, in line with expectations, versus £580.9m last time.

The conventional generation arm lost £12.9m. It made £34.8m profit last time. Scottish Power noted a fall in output and reduced margins on ancillary services.

Total earnings before interest depreciation and amortisation fell to £825m from £925m.

The parent Iberdrola Group increased net profit 18.4 per cent to €2.41bn (£2.1bn). It said international businesses compensated for poor results in Spain.

SSE and the owner of Npower are in talks to combine their retail arms in what would become a separate firm.

First Minister Nicola Sturgeon has proposed the creation of a publicly-owned, not-for-profit energy company in the hope of reducing bills.