Ofgem has accepted binding commitments from energy supplier
SSE to address concerns that it may have abused its dominant position in the
electricity connections market.
The commitments conclude a two year investigation where
Ofgem provisionally noted that SSE was likely to hold a dominant position in
the markets for non-contestable connection services for connections to its own
networks. Ofgem had concerns that by
providing connections to independent network operators or independent connections
providers on terms that were different to those that it offered to its own
subsidiaries it would place those rivals at a competitive disadvantage.
SSE has committed to an overhaul of its pricing policies and
internal restructuring to reduce the risks of anti-competitive conduct in the
future. It will also conduct regular compliance reviews which will be externally
audited.
As a result of accepting these commitments Ofgem will not
reach a formal view on whether or not SSE has committed an infringement of
competition law. SSE must implement the
remedies by 3 May 2017, being six months from Ofgem’s acceptance of the commitments.
According to SSE, the commitments will require it to make
substantial changes within its operations although they probably fall short of
what competitors were hoping for.
The commitments echo similar themes to those raised in
competition investigations in the energy sector by the European Commission,
where the vast majority of cases have been resolved using commitments under
Article 9 of Regulation 1/2003.
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