Power firm slammed for failure to pass on price cut

Spanish owner Iberdrola said Scottish Power delivered underlying earnings of 1.29bn in 2009, with the impact of the weak pound stripped out, accounting for 21 per cent of the wider group earnings.

But it said UK electricity customer numbers fell 5.9 per cent to 3.2m and remained flat at two million for gas, while energy demand among cash-strapped households and businesses fell by 2.7 per cent for electricity and 7.9 per cent for gas.

News of its UK profits rise was slammed as "indefensible" by an energy consultancy, as wholesale prices have fallen sharply in the last year.

David Hunter, an analyst at McKinnon & Clarke, said: "Despite wholesale prices going into freefall, Scottish Power hasn't cut domestic standard tariffs in almost a year.

"Failure of the 'big six' suppliers to pass on to customers the massive reductions in wholesale energy prices, which they have been enjoying since 2008, is scandalous."

Annual results due tomorrow from Centrica are expected to show operating profits for its British Gas residential arm of 554m, up from 379m in 2008.

British Gas became the first of the major players to lower gas prices recently with a seven per cent cut for its eight million customers, but Scottish Power has not cut prices since last February, when it reduced average gas bills by 7.5 per cent and electricity bills by three per cent.

A spokesman for Scottish Power said profits in the UK were boosted by an eight per cent reduction in costs due to savings made across its IT operations.

This offset a drop in demand from recession-hit customers, the group said.

It also reduced bad debts from customers in arrears by 12 per cent last year as it encouraged customers to pay by secure payment, with 75 per cent now on direct debit or pre-payment meter.

Earnings for the wider Iberdrola group rose 6.3 per cent to e6.82bn (5.99bn) in 2009.

But the figures do not include results for January, which was one of the highest on record for energy usage due to the freezing weather.