In their response to the CMA referral consultation, Centrica stated as part of the CMA’s investigation into vertical integration, a “comprehensive analysis” into the ownership of networks should be completed.
Centrica said the study should assess whether ownership of networks by energy suppliers “results in any distortion of competition”, such as removing the need to ensure network charges represent value for money for consumers.
This formed part of Centrica’s wider call for the CMA to investigate network and transmission costs, and it added these costs have “escalated considerably in recent years”, contributing to the loss of consumer trust.
Centrica added it is “necessary” for the investigation to take into account “all the determinants of retail price movements”, including the impacts of government policy.
SSE, which owns and operates transmission and distribution networks in Scotland and southern England, stated the scope of the reference to the CMA should exclude networks.
This was because the networks are “separate legal entities” to the other parts of the business, and “are subject to robust and challenging economic price regulation” from Ofgem.
SSE stated the State of the Market Assessment by Ofgem gave no reasons to why the CMA should investigate the transmission and distribution markets.
Should the CMA referral be set to include an investigation into energy networks, SSE said it would “require a further consultation” on the terms of the reference, and the impact it would have on the current price control review process.
Despite its contrasting view to Centrica, SSE also voiced its support for a broader CMA investigation, and said it was “critical the terms of reference which underpin it are sufficiently wide to cover all the main issues where there is public concern”.
Eon chief executive, Tony Cocker, also called for the CMA to have “extra areas of focus” for its investigation.
He said: “By empowering the CMA to have a strong, clear and focused remit we can take another step along the road towards ensuring clear outcomes and restoring confidence.
“Expanding the current reference to cover the supply and acquisition of energy in Great Britain and matters ancillary to these activities, would give this investigation the chance to have the greatest possible impact on customers.”