ScottishPower’s chief executive Keith Anderson has called for “unprecedented action” amid the ongoing energy crisis whilst laying out proposals to help reduce household bills over the coming winter months.
In an open letter, Anderson stated he believes the Government could integrate support measures to help the most vulnerable in the winter whilst also setting up a deficit fund to cover the difference between what people pay and how much it costs to supply their homes with gas and electricity.
This could be underwritten by the Government, or a financial institution, and be repaid over a long-term period to smooth out costs. As a result, energy companies would be able to recover loses in full and prevent supplier failures.
If integrated, the measures could also provide time to upgrade the energy system and transition to cheaper and readily available renewable energy. Once this has been achieved, Anderson believes the price cap should be replaced with a social tariff to protect the most vulnerable from fuel poverty.
“Britain has rightly stood up for Ukraine, standing united with those in need and we must continue to do. But we must also support people here during these unprecedented times,” wrote Anderson.
“Unprecedented times call for unprecedented action. And we need action imminently.”
His proposals could have a role in mitigating the impact that the price cap will have on household funds, with Cornwall Insight predicting the October Default Tariff Price Cap to rise by over £200, and sit at £3,582. Meanwhile, its prediction for upcoming price cap period will see households pay an expected £4,266 a year for the three months to March 2022.
Investec’s Martin Young similarly suggested a change to price cap methodology along with the continued volatility in the wholesale market will push the price cap over £4,200 come January.
Anderson has called for further government action repeatedly over 2022, including speaking with fellow representatives from major energy companies in April at a Department of Business, Energy and Industrial Strategy Select Committee.
At the time, he noted that the size and scale of the energy crisis and the knock on impact on consumer bills is now “beyond what this industry can deal with”. Since this point, wholesale prices have continued to rise amid continued geopolitical uncertainty.
As such, calls for government action have continued to grow louder, with the likes of the CBI, the Money Savings Expert Martin Lewis, charities such as Age UK, and political parties including the Labour Party all adding the voices.
