Energy firm charge hikes to hit poorest households

Wednesday 13 February 2013

SCOTTISHPower has been criticised for increasing service charges for customers who are struggling to pay their bills.

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Stuart MacDonald

The energy giant, one of the UK's five major suppliers, has announced it is raising the cost of reinstalling supplies to some households cut off due to out-standing debts by almost 25%.

It is also putting up the fees for fitting single pre-payment meters relied on by those on low household budgets by the same percentage. ScottishPower said it will only incur the charges if all other options to recover debts have been exhausted, stressing it will only affect a small number of people.

But James Granger, of Fuel Poverty Action, said: "These increased fees will send a shiver down the spine of Scottish Power customers already making the impossible choice between heating and eating. "Meter-users are already forced to pay even more for their energy than others, even though it's those living the most precarious lives that have meters forced on them and despite the fact meters mean the constant threat of being cut off. "That ScottishPower customers will be charged sky-high fees for meters to be forced upon them adds insult to injury." Mr Granger added: "This is just the latest example of the Big Six energy companies trampling over our rights to rake in even higher profits. People want the alternative: renewable energy is cheaper and cleaner. "A decentralised renewable energy system, under the control of communities, not a corporate cabal, could provide warm homes for all and tackle climate change."From March 8, reinstallations of electricity and gas will cost up to £124.69 each – an increase of almost 25%. Households on a lower tariff will see the charges rise by 30% to £64.77. The cost of installing a single pre-paid meter will jump more than 25% to 286.85 while lower tariff households will now pay £211.54. Two months ago, ScottishPower, which has 5.2 mil- lion customers, imposed a 7% rise in its gas and electricity costs. Consumer groups have hit out at the charges which they say will punish peopleThe Glasgow-based company announced the changes in a letter to its customers which also advised them to save energy by using low energy lightbulbs and washing clothes at 30 degrees. It is understood the charges have been increased due to the rising cost of taking legal action against customers who fail to pay their bills. Customers who are up-to-date with their payments are not charged for meter fitting or reconnections. Matt Whitaker, energy expert at comparison website uSwitch.com, said: "In these difficult financial times people will be disappointed and probably a bit confused by this letter. In reality, I suspect very few ScottishPower customers will actually be affected, but the letter could be clearer about exactly who is affected, when and why."The important thing now is for any customer who is struggling with their bills, or who is thinking of moving to or from a prepayment meter, to call ScottishPower as soon as possible to understand what these charges could mean for them."Industry watchdog Ofgem revealed this week some 137,372 Scottish households are in debt with electricity bills, while 104,000 owe money for gas. A ScottishPower spokesman said: "This letter refers to a small increase in costs that affects a tiny minority of customers. "ScottishPower has to inform customers of all potential changes to their charges even if a small number are affected. These changes relate to a very small number of customers and do not affect energy prices."

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Energy firm charge hikes to hit poorest households

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