MSE News

SSE and Npower merger gets final green light

The competition watchdog has approved the proposed merger between big six energy companies Npower and SSE, following a review.

The merger was provisionally approved in August, but there were concerns about how the deal would impact standard variable tariff (SVT) prices.

Following a review, the Competition and Markets Authority (CMA) has today it announced it has decided to clear the merger after finding that SSE and Npower are not close rivals for customers on these tariffs.

If you're looking to switch energy providers, you can do a full comparison via our Cheap Energy Club.

Why did the CMA approve the merger?

The CMA found that the number of people switching energy provider is the highest in a decade and the proportion on SVTs has fallen, with customers usually switching to a cheaper, non-SVT tariff.

But it considered whether a reduction in the number of large suppliers would encourage larger or earlier price rises, and found that Npower and SSE do not pay special attention to each other.

It therefore concluded that the merger wasn't expected to have a significant impact on SVT pricing.

The CMA added that Ofgem's price cap is also expected to protect people on SVTs.

What is a standard variable tariff?

A standard variable tariff, or SVT, is an energy supplier's 'default' tariff. The costs are variable, so the rate you pay can go up or down depending on wholesale energy costs – what suppliers pay for gas and electricity – and there are no exit fees or a fixed end date.

If you're on a fixed tariff and your deal ends, you'll most likely be rolled automatically onto your supplier's SVT if you do nothing.

SVTs are typically more expensive than other plans a supplier can offer, so if you're on one, it's worth looking to see if you can switch to a cheaper deal.

What does the CMA say?

Anne Lambert, chair of the CMA's inquiry group, said: "With many energy companies out there, people switching away from expensive standard variable tariffs will still have plenty of choice when they shop around after this merger.

"But we know that the energy market still isn't working well for many people who don't switch, so we looked carefully at how the merger would affect SVT prices.

"Following a thorough investigation and consultation, we are confident that SSE and Npower are not close rivals for these customers and so the deal will not change how they set SVT prices."

Both Npower and SSE have said there's no immediate impact for customers, so if you're with either of them, you don't need to do anything for now.

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