UK energy firm SSE to split retail and wholesale arms

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LONDON, March 26 (Reuters) - British utility SSE (LSE: SSE.L - news) is to split its wholesale and retail divisions and freeze prices in a drive to improve transparency following a backlash over how energy companies set their bills.

The company said it would freeze its household energy prices until at least January 2016, responding to growing public outrage about high energy costs.

"This legal separation will enhance the transparency of how SSE measures and reports the performance of these businesses," the firm said in a statement.

The 'big six' - SSE, Scottish Power, Centrica (LSE: CNA.L - news) , RWE (Xetra: RWE.DE - news) npower, E.ON and EDF (EUREX: DE000A1XQ1S7.EX - news) Energy - were dragged into a political row last year when the opposition Labour party accused them of overcharging customers and promised to freeze prices if elected in 2015.

The companies have denied the allegations but Britain's Secretary of State for Energy Ed Davey last month called on the authorities to consider breaking up energy companies if they were found to be abusing monopoly positions.

The Labour party has called for a restructuring of the energy market whereby utilities should separate their retail and generation businesses.

In a detailed update, SSE also said it would sell assets and businesses to raise 1 billion pounds ($1.65 billion) to reduce debt and would cut an additional 500 staff in Britain.

It forecast capital investments of 1.6 billion pounds in 2014/15, above analyst estimates.

($1 = 0.6059 British Pounds) (Reporting by Karolin Schaps, Editing by Paul Sandle and Kate Holton)