The link up with Union Energy, the fuel company set up by the Trades Union Congress, follows a similar partnership between ScottishPower and the Automobile Association. ScottishPower will be given sole responsibility for supplying fuel and billing customers in a five-year contract, with Union Energy organising marketing and retaining its brand name.
"The cost for us of becoming a fully fledged supplier was just too prohibitive. We were always clear that we needed a partnership with an existing supplier," said Mike Jones, chairman of Union Energy.
ScottishPower was chosen from a shortlist of six bidders, most of which were regional electricity companies, and won partly because its workforce was highly unionised.
Union Energy said it hoped to poach 500,000 homes from British Gas and the regional electricity companies over the next three years.
The 7 million UK trade unionists speak for 4.5 million homes, with annual bills worth pounds 2.5bn.
- Chris Godsmark