Scottish Power's £100bn plan to freeze energy bills for two years

One of the UK's largest power companies is proposing a £100bn plan to freeze energy bills for two years.

Scottish Power's chief executive Keith Anderson has presented the plans to UK Business Secretary Kwasi Kwarteng. Mr Anderson told BBC Scotland that the UK government was "seriously considering" the proposal.He will present the same plan to Scottish First Minister Nicola Sturgeon at a special summit she is chairing on the energy bills crisis.

The price cap sets the maximum price that suppliers can charge households for each unit of energy they use. It rose by 54% in April, meaning a household using a typical amount of gas and electricity would pay £1,971 per year. Regulators at Ofgem are due to announce the revised limit on Friday, when this figure is expected to rise to £3,576. This is likely to be followed by further increases in 2023.

Energy suppliers Scottish Power, OVO Energy and E.On are also due to take part in Tuesday's summit, with Ms Sturgeon having already insisted that the rise in the cap in October "can't be allowed to go ahead". Scottish Power's plan to stave off an energy price emergency would involve the government guaranteeing loans to the energy companies. This would enable them to keep bills frozen while buying the gas needed for the next two years. The £100bn figure is Scottish Power's best estimate of the difference between what it will actually cost to buy the energy and the current price cap. The so-called deficit fund would be repaid through bills over the next 20 or so years. Sources close to the company said that Kwasi Kwarteng, who is tipped to be the next chancellor if Liz Truss is the next prime minister, was broadly receptive to the idea.

Mr Anderson told BBC Radio's BBC Good Morning Scotland programme that "bold" action was needed to bring down bills as he warned the Ofgem price hike would be "horrific". He said: "I think we've got to a stage now where this is a national crisis, it's of the scale of the pandemic and we need national action." The Scottish Power boss proposed the price cap should be frozen at the current level for at least two years as the price of wholesale gas continues to rise. He urged Westminster to set up a deficit fund to cover the difference between what people pay for energy and how much it costs to supply their homes.

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