SSE faces competition probe

Household money

Updated on 21 January 2015 | 0 Comments

Energy giant to be investigated over competition concerns.

Ofgem is to investigate whether SSE has restricted competition in the electricity connections market.

The energy regulator announced it was to probe the Big Six supplier, as it called for improved competition within the market and set out a number of steps it was to see energy firms take.

What are electricity connections?

When somone connects to the electricity grid for the first time, for instance if they are moving into a new-build home, they can choose who sets up their electricity connection.

This is known as ‘contestable work’, since more than one company can offer the service. In theory this competition should drive costs down for customers and improve the quality of service they receive.

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SSE investigation

Ofgem has concerns that SSE, one of the Big Six energy suppliers, has taken advantage of its position in the market to the detriment of other companies offering the work.

As a result it has opened an inquiry, though the regulator was at pains to emphasise that the fact that it has launched an investigation does not imply that SSE has breached competition law.

Connections market

The announcement of a probe into SSE follows a six-month investigation into the connections market. On top of the inquiry, the regulator has detailed how it will improve competition generally.

This centres on requiring network companies to commit to an enforceable Code of Practice, which will reduce the reliance of independent competitors on local electricity network companies. As this will "level the playing field" for providers, it should become easier to get connected to the grid, and cheaper to boot, according to Ofgem.

The Code of Practice will be developed by the distribution network companies, who will then submit it to Ofgem for review by mid-2015.

It's a busy time for Ofgem, which has also announced new rules for energy price comparison sites.

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