High energy prices in the UK helped ScottishPower record a big increase in revenues last year paving the way for the firm to pay £400m dividends to a company owned by the group�s Spanish owner.

High energy prices in the UK helped ScottishPower record a big increase in revenues last year paving the way for the firm to pay £400m dividends to a company owned by the group's Spanish owner. However, bad debts increased as some customers struggled to pay their energy bills amid the recession.

Accounts for ScottishPower UK plc filed at Companies House and obtained by The Herald show the company recorded revenue from sales of energy to external customers of £4.8bn in the year to December, compared with £2.8bn in the previous accounting period. That covered the nine months following the £11.6bn acquisition of ScottishPower by Iberdrola in April 2007.

On an annualised basis energy sales revenues increased by 29%.

The report to the accounts directors indicated the company enjoyed double helpings of good fortune as a result of increases in energy prices during the year.

It was able to charge more to companies that bought the output from its generating stations on wholesale markets.

It also increased the prices that it charged to consumers who bought their energy from the firm. In 2008, some 3.4 million consumers bought electricity from Scottish- Power while two million bought their gas from the firm, up from 3.3 million for electricity and 1.9 million for gas in the nine months to December 2007.

"In energy wholesale higher market prices in wholesale power and gas more than offset lower volumes" wrote the directors.

"Revenue within Energy Retail increased due to higher prices following tariff increases during the year, which were implemented as a result of rising wholesale energy costs."

The directors said the group delivered "gross margin and net operating expense" improvements, indicating that the company managed to put up prices by more than its costs increased. The profit from operations increased to £879m from £570m, or £758m on an annualised basis.

Dividends of £400m were paid during the year to a ScottishPower holding company that is ultimately owned by Iberdrola. No dividends were paid in the previous nine months.

However, the directors noted that provisions were higher year on year. "This was due to an increase in bad debt provisioning costs within the Energy Retail business reflecting the impact of tariff rises and the general economic downturn."

The prices charged by utilities generated considerable controversy last year. Some consumer groups and businesses complained that power firms were quick to raise prices when wholesale prices increased but slow to pass on reductions.

ScottishPower directors noted that in October the regulator Ofgem had concluded that many consumers had benefited from lower prices and that the major suppliers were acting competitively with no evidence of cartels.

They said ScottishPower was co-operating with Ofgem in a process of consultation about measures that could be taken in areas where it had been found that consumers could benefit more from the competitive market and where the functioning of the market could be improved.

The total remuneration of executive directors increased to £3.5m, including £1.3m compensation for loss of office, from £1.3m in the preceding nine months.

The accounts state that the highest paid director received £1.1m, including £632,000 compensation for loss of office, up from £294,000. Three directors resigned from the board during the year: Robert Benns, Stephen Dunn and Susan Reilly. Chief executive Nick Horler joined in September.

A spokesman said the accounts only detailed parts of ScottishPower and did not accurately reflect the complete figures. He said ScottishPower's consolidated financial data was already published as part of Iber- drola's annual report. This shows ScottishPower generated income of 910m.

The spokesman said: "In 2008 we invested £1bn in the UK including the construction of Europe's largest wind farm, substantial environmental improvements to our power stations and essential re-inforcements to our electricity networks. We also spent £1bn with UK companies.

"ScottishPower also introduced a range of initiatives for our most vulnerable customers including a social tariff".