Regulator dismisses fears over Npower and SSE tie-up
THE energy industry’s biggest shake up in decades will move ahead after plans to merge Npower and SSE’S retail operations were cleared by the competition authority.
The Competition and Markets Authority (CMA) dismissed fears that reducing the sector’s big six suppliers to five would dampen competition in the market. The number of households switching between suppliers is close to record highs due to a boom in new entrants to the market in recent years.
The watchdog added that the tie-up would not have an impact on the most expensive deals in the market because the pair do not compete closely on standard variable tariffs (SVTS) and customers seldom switch from one to the other.
Anne Lambert, chairman of the inquiry group at the CMA, said: “With more than 70 energy companies out there, we have found that there is plenty of choice when people shop around.”
Standard energy deals have come under intense political scrutiny in recent years and tariff rates are to be capped from this winter. The looming threat was a key driver of SSE’S decision to carve off its retail business, which was first reported by The Sunday Telegraph last year.
The supply arm will merge with the Npower business to create a new listed energy company by early next year.
Alistair Phillips-davies, chief executive of SSE, said: “The scale and pace of change in the British energy market continues to be significant and requires us to evolve to stay relevant, competitive and sustainable. ”
George Salmon, of Hargreaves Lansdown, said their solution is to “seek safety in numbers”.
The CMA’S final report on the deal is due before the end of October.