Ofgem probes Scottish Power offer

22/06/11

By Sarah Tawton

Regulators have launched an investigation into a "potentially misleading" offer from Scottish Power.

Energy watchdog Ofgem will look into the firm's £459 savings claim made as part of its "Direct October 2012" offer.

The scheme was unveiled earlier this month when the group announced its latest hike in gas and electricity prices.

Scottish Power customers will face an average 19 per cent rise in their gas tariffs from August 1, while electricity prices will go up by 10 per cent.

As part of a proposed shake-up of the energy market, Ofgem has previously threatened the "big six" with a referral to the Competition Commission if they do not simplify their prices.

The watchdog also ordered the big firms to sell off between 10 per cent and 20 per cent of their electricity output to allow smaller suppliers to enter the market.

Under the Scottish Power Direct October 2012 Offer, the company guaranteed prices would remain a minimum of 1 per cent per year below its standard monthly direct debit gas and electricity prices until September 30, 2012.

But discussing the product, Alistair Buchanan, chief executive of Ofgem, told the BBC that "when you look at the small print it looks very different from that".