ScottishPower’s £800million loan to its parent company’s US arm has been questioned by MPs.
Iberdrola’s American operations were loaned the money in 2009, half of which has not been paid back yet, revealed The Daily Telegraph.
MPs raised concerns that British consumers could be at risk.John Robertson, Glasgow North West MP and a member of the energy select committee told ELN: “It seems Iberdrola is playing musical chairs with its portfolio on the backs of British consumers and some of the poorest like those in my Glasgow constituency.
“I think that British energy consumers are feeling quite hard done by and rightly so. We have seen UK energy prices rise faster than on the continent. And now we could have a situation whereby UK consumers could be subsidizing US consumers due to the revelation of this loan. Now for all the will in the world that is just not on.”
Tim Yeo, Chair of the energy select committee said: “We don’t want to feel that British consumers are being in any way exploited for the benefit of any overseas shareholders,” the daily newspaper reported.
However, ScottishPower insisted that it has invested billions in the UK and that such loans are standard practice within large companies.
A ScottishPower spokesperson said: “This is a normal transaction to manage cash within our group and is similar to standard liquidity measures that are made by many multinational groups.This transaction has no connection with operational business decisions.”
The spokesperson added that since integrating with Iberdrola in 2007, ScottishPower’s debt level has been reduced and £2.7billion has been invested in the UK. The company plans to invest £3billion between 2010-2012 on a mixture of renewables, networks enhancements and low carbon projects.