Ofgem wants tougher rules on mergers and acquisitions
Energy regulator wants to restrict mergers between energy companies
Ofgem has announced plans to amend legislation which will
restrict mergers between energy companies.
The British energy regulator claims that while some mergers may
benefit customers, more mergers would result in less
Ofgem would therefore have a difficult task of forcing a small
pool of companies to improve customer service and efficiency.
"Ofgem supports legislative change to require the merger
authorities to take this factor into account when assessing
mergers, as is the case in the water sector," said a statement from
The regulator claimed that it would not limit allowed revenues
by a pre-set amount following a merger, as it would instead set
rates for companies to share cost savings with customers.
The new policy could affect the proposed sale of EDF's
distribution network to one of its rivals. The firm are currently
considering a number of bids.
One of the bidders, Scottish and Southern Electric, claim that
the purchase will be more than expected following the new