Watchdog warns of merger dangers

ENERGY regulator Ofgem called for a change in energy network legislation yesterday, saying company mergers could hamper its ability to regulate effectively.

While some mergers could benefit customers, a reduction in the number of companies in the networks sector would make it more difficult to push for efficiencies and improve customer service, it said.

Ofgem will no longer seek to reduce the limit on revenues by a pre-set amount following a merger. Instead, it will set rates for companies to share cost savings with customers.