6 February 2003 - UK utility Scottish Power reported its fifth consecutive quarterly improvement in pre-tax profits Wednesday but predicted a weak market in the UK over the next few years.
Third quarter profits were £251.8m ($414m) boosted by a recovery in its US PacifiCorp business. Losses in the US due to the Californian power crisis, outages and hedging activities left the group with large losses in 2001 since when PacifiCorp's profits have risen 88 per cent.
UK business did manage to turn in a profit despite disastrously low wholesale power prices and managed cost saving of £20m during the quarter.
But Scottish Power's Chief Executive Ian Russell said that the depression in U.K. wholesale electricity prices was likely to continue. "I think the average annual contract for power will stay at less than £20 per MWh for another three to four years," Russell said on a conference call following the integrated utility's release of its third-quarter results.
Scottish Power's 5000 megawatts of generation capacity and 3.6 million retail energy customers has left it relatively balanced, limiting the impact of the weak price environment on the company, Russell said.
"I continue to feel the thing that is missing from the market is long-term contracts," he added.