Competition watchdog expands scope of its inquiry into controversial merger of SSE and Npower energy supply divisions

The UK competition watchdog has published details about what it intends to examine in its investigation of the proposed merger between the retail power units of a Scottish power giant and another Big Six energy provider.

The Competition and Markets Authority (CMA) said earlier this month it had launched in-depth investigation into the tie-up between Pearth-based utility SSE and Innogy’s Npower, saying it may reduce competition and increase prices for some households.

The SSE – Npower merger would create Britain’s second-largest retail power provider and reduce the “Big Six” dominating the market to five companies when they are already facing political scrutiny for high prices.

Now the CMA has announced that it will consider the impact of the merger on the supply of gas and electricity to customers in Britain.

The CMA will also consider any implications arising from plans for a larger asset swap between Innogy’s parent company RWE and E.ON which also has a British retail energy business.

The CMA will also look at the potential impact on British independent energy supplier Utility Warehouse, which has around 600,000 customers and relies on Npower for is gas and electricity supplies.

A CMA spokesman explained: “This theory of harm considers whether the merged company would have an incentive to raise standard variable tariff prices to increase its wholesale prices to Utility Warehouse.”

The CMA is expected to issue a final report by 22 Oct 2018.

30 May 2018

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