ScottishPower

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Scottish Power logo[1]
Glasgow, Scotland[2]

ScottishPower Plc is a vertically integrated energy company headquartered in Glasgow, Scotland. It is the distribution network operator for the central and southern Scotland and the Merseyside and North Wales regions. The company also supplies electricity and natural gas to homes and business around the United Kingdom and generates power for supply to the grid. It also owns PPM Energy in the United States. ScottishPower is quoted on the London Stock Exchange as part of the FTSE 100 Index, and has a secondary listing on the New York Stock Exchange.

History

Scottish Power was formed in 1990, in preparation for the privatisation of the previously nationalised Scottish electricity industry the following year. Previously the UK government had privatised the English and Welsh electricity industry by splitting the market into 12 regional electricity companies (RECs) and two power generators. However in Scotland, the industry was already organised on an integrated generation, distribution and supply basis, and this integration survived the privatisation to become a model for the rest of the United Kingdom. Scottish Power was largely formed from of the larger of the two Scottish electricity boards, the South of Scotland Electricity Board, whilst the other, the North of Scotland Hydro Board, eventually became part of the Scottish and Southern Energy Group (the nuclear power stations in Scotland were spun off into a third company, Scottish Nuclear, which was not sold off with ScottishPower and Scottish Hydro Electric, but was sold later as part of British Energy).

Company Chronology

Divisons

Energy Retail

Scottish Power distribution areas [3]

The Energy Retail division contains Scottish Power Energy Retail Ltd which holds the gas and electricity supply licenses and has over 5.2 million customers in the UK. Also included in this division is SP Dataserve Ltd which is responsible for the metering and data management work and is the first ever meter reading company to allow customers to text in their meter readings[4].

Energy Networks

The Energy Networks business contains three asset owning companies SP Transmission Ltd - holds the transmission license for central and southern Scotland and owns the part of the Moyle Interconnector with Northern Ireland Electricity, SP Distribution Ltd - holds the distribution licence for central and southern Scotland and SP Manweb Plc - holds the distribution licence for North Wales, Merseyside and Cheshire. A fourth asset management business SP Power Systems Ltd maintains and repairs the distribution networks on behalf of the owners and acts as the Distribution Network Operator. The work on the transmission grid is carried out by National Grid plc.

Energy Wholesale

Energy Wholesale contains two companies ScottishPower Generation Ltd which generates 6,200MW of electricity power in the United Kingdom using coal fired thermal power stations, combined cycle power stations, hydro-electric schemes, pumped storage generation and substantial wind farms.On 2006-04-27 Scottishpower were granted permission to build Europe's largest on-shore windfarm. The 322 MW / 140 turbine site will cost an estimated £300m and cover an area of approximately 55 km² of moorland south of Glasgow. Also within this division is ScottishPower Energy Management Ltd which is responsible for buying and selling wholesale energy.

PPM Energy

PPM Energy Inc was previously the competitive arm Pacificorp but was made a separate business in 2002. It is involved in renewable energy and gas storage amongst other things in the US.


Subsidiaries

Manweb

Scottish Power was the larger of the two Scottish energy companies and benefited from being both a generator and supplier of power. In 1995 it acquired the English Regional Electricity Company, Manweb which supplied Merseyside and North Wales. In 1996 the company diversified into the water supply business with the purchase of Southern Water (which was sold again in 2002). When the supply of energy into British homes was opened up to competition, ScottishPower entered this market, stealing share from the previous gas supply monopoly British Gas and also building new market share in England and Wales.

Thus

Scottish Power established the telecommunications company, Thus (originally known as ScottishTelecom). This was floated on the London Stock Exchange with ScottishPower retaining a 20% stake, until 2002 when it sold its interest.

Pacificorp

In 2000, Scottish Power completed the acquisition of Pacificorp which supplies electricity in the western United States, which operates as Pacific Power (in the regulated energy industries of the states of Oregon, Wyoming, Washington, and California), and as Utah Power (in the regulated energy industries of the states of Idaho and Utah). In May 2005 ScottishPower announced that it had agreed to sell Pacificorp to MidAmerican Energy Holdings Company, a company controlled by Warren Buffet's company Berkshire Hathaway, for US$5.1 billion in cash and US$4.3 billion in debt and preferred stock. The successful completion of the deal was announced on 21 March 2006, after securing regulatory approvals. The deal did not include PPM Energy (which as Pacificorp Power Marketing was formerly the non-regulated subsidiary of Pacificorp). Scottish Power intends to return a large proportion of the proceeds to its shareholders.

Rejected takeover bid from E.ON

Following the announcement, the group's share price rose, but were now widely seen as vulnerable to a takeover. It was soon revealed that German energy group E.ON, who also own Powergen, were interested in a takeover. On November 22 2005 the board rejected an offer from E.ON of 570 pence a share, which would have valued the group at £10.7 billion. [5]

Takeover bid from Iberdrola

On November 28 2006, the board of directors of ScottishPower agreed to a £11.6 billion takeover bid by the Spanish energy firm Iberdrola[6]. If approved by shareholders next year, the deal could create Europe's third largest utility company.

People

Board

  • Charles Miller Smith Joined the Board as Deputy Chairman in August 1999 and was appointed as Chairman in April 2000.
  • Euan Baird Joined the Board in January 2001 and brings executive level experience in the electronics and engineering industry to the ScottishPower Board.
  • Donald Brydon Joined the Board in May 2003 and is the senior independent director.
  • Nick Rose Joined the Board in February 2003 and he is Chairman of the Audit Committee, nominated as the Committee’s designated “financial expert”.
  • Nancy Wilgenbusch Joined the Board in June 2004.
  • Peter Hickson Joined the Board on 1st September 2006.

Management Team

Source, March 2007.

Previous Members

Fat Cat payoffs

The gas and electricity provider's former chief executive Ian Russell and three colleagues received £10.9m for pay and pension compensation. The sums have been branded 'obscene' by the Scottish National Party energy spokesman Richard Lochhead, and come to light just three months after the electricity and gas provider warned customers about inflation-busting bill hikes.
Mr Russell, who left in January this year after five years as chief executive, received a £2.3m compensation payment as well as benefiting from a resultant pension top-up of £2.7m. The compensation sum is more than three times his salary of £648,000, while his pension windfall nearly doubled his total entitlement to £6.8m. His colleagues Charles Berry and David Nish, who both left the firm last September, pocketed a total of £2.6m and £2.2m in extra compensation and extra pension sums respectively. And Judi Johansen, the former head of the company's PacifiCorp arm that was sold this year, walked off with a total of £1.1m.
The figures are published in Scottish Power's 2005/06 annual report and accounts, and are on top of their normal pay and pension entitlements totalling a further £10.5m. The plc made £675m profit before tax in the financial year to March 2006. Scottish Power raised gas prices by 15% and electricity by 8% in March this year, only to warn that bills would rise again due to high wholesale costs. [7]

PR agencies

Who They Sponsor

Fun Facts

External Links

ScottishPower website [8]
ScottishPower Gas and Electricity Customer website [9]
ScottishPower Energy Networks website [10]

References

  1. ^ Photograph from WikipediaScottish Power, accessed 22 March 2007.
  2. ^ Photograph from WikipediaGlasgow, accessed 22 March 2007.
  3. ^Sacked power chiefs get 'obscene' pay-off This is Money, 18 June 2006.
  4. ^ Photograph from ScottishPower Energy Networkshomepage, accessed 1 April 2007.
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