Yahoo Finance Big Six Could Be Broken Up By Watchdog
The Big Six power companies face being broken up by the competition watchdog, as the energy regulator is expected to refer them for a full-scale review.
When Ofgem publishes its "state of the market" report today, it is likely to announce plans to call in the new Competition and Markets Authority (CMA) for a two-year investigation into the sector.
It would be the first full-scale competition inquiry into the energy market - and would put the UK's biggest suppliers under unprecedented scrutiny.
The CMA, which takes over from the Competition Commission next month, could force a major shake-up of the industry, potentially forcing the Big Six to separate their power-generation and retail businesses.
In an apparent attempt to forestall the probe's findings, SSE (LSE: SSE.L - news) has already announced it will legally separate its wholesale arm - which includes energy production and storage - from its retail division, which sells energy to homes and businesses.
Ofgem is likely to hold off from immediately referring the firms to the CMA, instead suggesting a one-month consultation on the move.
The Big Six - British Gas, EDF Energy, Eon (Taiwan OTC: 3411.TWO - news) , Npower, Scottish Power and SSE (Berlin: SCT.BE - news) - have faced sustained criticism over rising bills and soaring profits at a time when household wages are being squeezed.
The firms deny profiteering, saying they have had to increase their bills due to rises in wholesale energy prices and green taxes.
Consumer group Which? and the Federation of Small Businesses were among the latest to push for a CMA inquiry.
They wrote a joint letter earlier this week to the Office of Fair Trading, Ofgem and the CMA, saying competition needed to be increased.
On Wednesday, SSE also pledged to freeze household gas and electricity prices until January 2016.
The move, which was hailed by Prime Minister David Cameron as "hugely welcome", immediately put SSE's rivals under pressure to do the same.
"It is our policy that bills should be cut and bills are being cut under this Government," Mr Cameron said.
Six months ago, Labour pledged to force suppliers to freeze prices.
But the policy was dismissed at the time by Mr Cameron as unworkable and "Marxist", while SSE said it would lead to "unsustainable loss-making retail businesses".
Labour leader Ed Miliband on Wednesday told the House of Commons SSE's apparent U-turn "totally demolished" the Prime Minister's arguments on prices.
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