The Business, Energy and Industrial Strategy (BEIS) Committee is calling for an investigation into the proposed merger between Big Six firms SSE and npower.
It has written to the Competition and Markets Authority (CMA) to launch a probe as it is concerned the merger may lessen competition and affect energy consumers.
The merger would reduce the Big Six energy companies to five, with almost half of the domestic energy share held between British Gas and the proposed merged business.
Committee Chair Rachel Reeves MP said: “The energy market isn’t working for consumers. The proposed merger between SSE and npower risks damaging the development of a more competitive energy market, reducing consumer choice and threatening to be a bad deal for energy consumers.
“The CMA needs to look at the potential impacts of this merger and launch a full investigation if there is any risk to competition within the energy market.”
SSE however believes the merger will not have a negative impact on competition.
A spokesperson said: “The merger will improve competition by offering customers a completely new model combining the resources of established players with the agility and innovation of an independent supplier – turning 60 competitors into 59, not five – and ultimately offering better value for customers.”