CMA: SSE-npower merger could increase energy prices

The competition watchdog is seeking remedies from the companies to prevent a more in-depth investigation on their proposed tie-up

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By Priyanka Shrestha

Some energy consumers could see higher bills as a result of the SSE and npower merger.

That’s according to the initial findings from the Competition and Markets Authority (CMA), which has been assessing whether SSE Retail and npower’s proposal to create a new energy company for domestic customers could reduce competition.

It found the rivalry between Big Six firms is an important factor in how they set tariffs and the removal of such competition could lead to higher prices for some customers.

The CMA said it would refer the merger for an in-depth investigation unless the firms offer remedies to address its concerns by 3rd May.

Rachel Merelie, Senior Director at the CMA said: “We know that competition in the energy market does not work as well as it might. However, competition between energy companies gives them a reason to keep prices down.

“We have found that the proposed merger between SSE Retail and npower could reduce this competition and so lead to higher prices for some customers. We therefore believe that this merger warrants further in-depth scrutiny.”

SSE believes the proposed merger will deliver benefits for the energy market and consumers.

Martin Herrmann, COO Retail at innogy SE added: “We are convinced that with the merger of npower and the UK retail business and energy services activities of SSE, we are creating an independent customer-focused British energy company that can offer our customers a more efficient and even better service and bring benefits to the wider market as well.”