The Competition and Markets Authority (CMA) has launched an investigation into the proposed merger of SSE Retail and npower.
It will assess whether the new company, which would serve around 11.5 million domestic customers, could significantly reduce competition.
The deal could possibly see the Big Six turn into a Big Five.
The competition watchdog said: “The CMA has been discussing the deal with SSE Retail and npower since it was announced. Now that the companies have provided the information necessary to start an investigation, the CMA has launched its review.”
Those wishing to comment can do so until 14th March 2018.
The deadline for the initial decision is 26th April 2018.