Ofgem accepts binding commitments from SSE to improve services needed for competitors to connect customers to its distribution network
Ofgem has accepted legally binding commitments from SSE. This follows a Competition Act investigation into whether its behaviour could have impeded competition for connecting new developments to its electricity distribution network in the South of England.
Hundreds of thousands of connections are made every year as sites, such as new housing estates and business premises, connect to electricity distribution networks. The whole market for providing these electricity connections is worth over £500 million per year in Great Britain, as independent companies compete against regional distribution network operators, such as SSE, to connect new customers to these networks.
Effective competition should help deliver cheaper connections, better customer service, and more innovative products.Ofgem’s investigation did identify competition concerns regarding SSE’s behaviour in providing services needed for competitors to connect new developments to its electricity distribution network in the South of England. These included inconsistencies in providing essential services needed to allow competitors to compete effectively, including inconsistency in quotes.
SSE has committed to putting in place new processes and procedures to make sure it provides these essential services to all parties on a consistent basis. These steps include the following:
- Splitting operations within SSE’s connections business to separate the team that provides essential services to the connections market from the team that competes in the connections market;
- putting in place an improved IT system to prevent inconsistent quotes from being issued for the same site without justification;
- mandatory and regular competition law compliance training; and
- frequent, independent, third party auditing of and reporting on SSE’s compliance with the commitments.
Ofgem considers that these commitments will fully address the competition concerns that have been identified.
As a result of accepting the commitments, Ofgem is closing its investigation with no decision made on whether or not SSE infringed competition law.
Since the investigation was opened, Ofgem has introduced a new Code of Practice and associated licence condition to force all electricity distributors to open up competition in the electricity connections market. Yesterday’s decision reinforces these new rules to ensure that the company effectively addresses the issues raised during the investigation. It helps open up the connections market to more effective competition.
Ofgem is committed to making sure there is more effective competition in the electricity distributions network market, to benefit consumers. It will continue to monitor the market for new connections to electricity distribution networks. It will take action wherever it finds evidence of a potential infringement of competition law.
Notes to editors
SSE has two electricity distribution networks, one in the South of England and one in Scotland. The investigation only related to the distribution network in the South of England. However, SSE has committed to implement the commitments across both of its distribution networks.
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For further press information contact:
Ruth Sommerville 0207 901 7460
Out of hours 07766 511470
Latest News from
Suppliers must do more to help those in debt, as report shows customers accrue more than £600 on average in unpaid bills17/10/2017 12:15:00
Suppliers must do more to help those in debt, Ofgem has said, as new research shows that customers are building up on average over £600 in unpaid bills on their gas and electricity accounts before suppliers step in to help them manage paying it back.
Ofgem extends price protection to 1 million more vulnerable households this winter11/10/2017 15:15:15
Around 1 million households will save £120 a year on average when Ofgem extends its prepayment safeguard tariff for more vulnerable people this winter.
Ofgem cuts £200m from electricity distribution network company allowances18/09/2017 10:15:00
Ofgem has confirmed that the allowances of some of Britain’s electricity distribution network operators (DNOs) will be reduced by around £200m in total following a review of performance in their previous price control (2010-2015).
Latest data on Consolidated Segmental Statements, Supplier Cost Index and standard variable tariffs31/08/2017 12:25:00
Ofgem has published complete annual data1 on the profit margins from the six large energy suppliers’ Consolidated Segmental Statements2 which Ofgem requires them to submit.
Ofgem’s response to National Grid’s proposed network upgrade to connect the new Hinkley Point C nuclear power station31/08/2017 09:15:00
Ofgem yesterday said that an upgrade to the high-voltage grid is needed to connect the new nuclear plant at Hinkley Point, but considers that the costs to consumers of the upgrade can be reduced.