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SSE and Npower merger could drive up energy prices, says Government

Nic McBride

Nic McBride
Apr 26, 2018


Customers could end up paying more for their energy if two major energy companies SSE and Npower merge.

The two companies announced their plan to merge in November last year – a merge which would create the second largest supplier after British Gas.

But the Competition and Markets Authority today said that could result in higher prices for customers.

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Rachel Merelie, senior director at the CMA, said: "Competition between energy companies gives them a reason to keep prices down.

"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."

The CMA’s investigation looked at the rivalry between the large energy companies and determined it was an important factor in how they set tariffs.

"We know that competition in the energy market does not work as well as it might,” Merelie said.

However, the CMA recognized that the removal of such competition could therefore lead to higher prices for some customers.

SSE and Npower have until May 3 to offer measures to address the CMA’s concerns.

 

SSE denies merger will see increasing costs

The merger will create a company supplying 11.5 million energy customers, making it the second biggest energy supplier in the UK, after British Gas, which has around 13 million customers.

Alistair Phillips-Davies, chief executive of SSE, said: "We remain confident that the proposed merger will deliver benefits for customers and for the energy market as a whole and that we will be able to demonstrate this to the CMA in due course.

"We look forward to continuing to work constructively with the CMA and other interested parties."

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Energy prices on the rise

Scottish Power has announced it will up its prices by £63 - and is blaming the smart meter rollout for it.

Nearly 1 million households will be affected by the hike.

This comes quickly after both British Gas and EDF announced they were increasing bills for more than 5 million customers between them.

British Gas raised its prices by 5.5% - increasing bills by an average of £60, to £1,161 a year.

EDF will increase its standard variable electricity tariff by 1.4%, or about £16 a year, taking the cost to £1,158 per year.

Our tip: Switch your deal now! You can easily beat all these price hikes by locking in a fixed deal today. Find one here.

A Spokesman Said's cheapest tariff is an average of £806 per year, meaning customers could save about £400 by switching to new tariff.