In 2016, SSE had requested a change to industry rules about charges paid by electricity generators for using the transmission system, which would have resulted in them receiving a £120 million rebate from National Grid.
It argued generators in Britain had paid more in transmission charges in 2015/16 than the maximum set under EU law.
SSE and EDF appealed to the Competition and Markets Authority (CMA) after Ofgem rejected the request.
The CMA concluded that – applying the correct approach to EU law – there was such an exclusion and therefore there had not been a breach of the cap and Ofgem was entitled to reject the modification request.
Andrew Wright, Senior Partner at Ofgem, said: “It is good news for consumers that the CMA has upheld Ofgem’s decision. If the modification had gone ahead, it is likely that the rebate would have cost consumers up to £120 million and led to further payments to larger generators in the longer term.”