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SSE and Npower merger given final go-ahead

Will the new energy company ‘combine the best of both’?

Two of the biggest energy companies in Britain are joining forces after the competition watchdog gave its final approval.

Households will still have ‘plenty of choice’ of standard variable tariffs (SVT), the Competition and Markets Authority (CMA) explained.

This follows a five-month investigation into whether the merger between Npower and SSE would result in a ‘substantial lessening of competition’ in the energy market and higher prices for consumers as a result.

The CMA said the companies are ‘not close rivals’ on these standard variable tariffs, which are in the spotlight for being the most expensive for customers.

Npower and SSE hope to launch their new joint energy company in the coming months.

Read on to find out what customers currently think of Npower and SSE. Or find the best energy deal for you by comparing gas and electricity prices with Which? Switch.

New gas and electricity company under scrutiny

The CMA said in August that it was likely to let Npower and SSE merge and now has confirmed it.

Anne Lambert, CMA enquiry chair, said: ‘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.’

Alex Neill, Which? managing director of home products and services, said: ‘We will be keeping an eye on this situation to ensure that, as temperatures drop, already hard-pressed households don’t face even higher energy bills as a result of this decision.

‘Consumers unhappy with their current energy provider should consider switching to a better deal, as they could save around £400 a year.’

Npower and SSE first announced plans to join to create a new gas and electricity supplier in November 2017.

When will Npower and SSE’s new energy company launch?

Previously the companies said they planned to complete the deal in the last three months of 2018, or the first three months of 2019. The new company would be an energy and services provider, rather than generating and selling electricity and gas.

Today, both companies have welcomed the CMA’s announcement.

Alistair Phillips-Davies, chief executive of SSE, said: ‘This is a complex transaction and there is still much work to do in the coming weeks and months. However, we’ve always believed that the creation of a new, independent energy and services retailer has potential to deliver real benefits for customers and the market as a whole.’

Npower said: ‘Preparations for the new British retail energy company are progressing,’ including gaining approval by SSE shareholders, appointing a CEO, chairman and executive committee for the new company.

Martin Herrmann, COO retail of Innogy SE (Npower’s parent company), said the new company ‘will combine the best of what both retail businesses have to offer, and build a better company for customers’.

Do customers like Npower and SSE?

Npower is the least-loved energy supplier, according to our most recent energy company customer satisfaction survey. It ranked lowest out of 31 energy companies included in our survey, according to its customers. It was the only energy company to achieve just two stars for value for money.

SSE received slightly more positive reviews. It ranked joint 24th (with Sainsbury’s Energy) and achieved four out of five stars for its customer service on the phone.

Smaller energy companies were rated best by their customers. The highest-ranked of the Big Six, EDF Energy and Eon, finished in joint-22nd position.

We surveyed more than 8,000 members of the general public in September 2017 about their energy supplier.

We’ll be watching closely to see how the new merged energy company fares compared to Npower and SSE in previous years, and how it matches up to rivals.

Find out if your supplier is among the best and worst energy companies.

Do SSE and Npower offer cheap energy deals?

Npower’s standard variable tariff is currently the second-priciest of the Big Six companies, costing £1,230 per year for a medium gas and electricity user.

Although Scottish Power’s is the priciest, Npower’s standard variable tariff still costs £352 more per year than the cheapest deal on the market.

SSE’s standard variable tariff is slightly cheaper (£1,196 per year), but many cheaper deals are available.

Both companies currently offer deals that are less expensive than their standard tariffs. Earlier this month Npower’s cheapest deal was £48 less than its standard tariff. SSE customers could save £60 by moving from its standard variable deal to its cheapest deal. But neither company offered among the cheapest deals on the market.

However, Npower and SSE are the only two of the Big Six firms not to have raised their prices twice this year.

Which? energy pricing research

Prices are based on a dual-fuel tariff available in all regions in England, Scotland and Wales paying by monthly direct debit, with paperless bills.

Energy usage is based on Ofgem’s annual average usage figures for medium users (12,000kWh gas and 3,100kWh electricity), paying by monthly direct debit with paperless bills. Data is from Energylinx. Prices given are averages across regions, are rounded to the nearest whole pound and correct on 1 October 2018.

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