The GMB union has called on business secretary, Greg Clark, to block the proposed merger of SSE plc (LON:SSE) and npower.
SSE last week said it had agreed to demerge its household energy and services business and combine it with npower, the UK arm of Germany’s Innogy.
The deal is subject to approval by shareholders and competition regulators in the UK and the European Union. SSE and npower are in discussions with the UK Competition and Markets Authority (CMA).
The GMB told Clark he should use his powers to block the deal if that if the CMA does not investigate.
Justin Bowden, the union’s national secretary for energy, raised concerns that the merger could reduce competition and lead to higher prices. The merger would see the “big six” energy suppliers turn into the “big five”.
"The merger between SSE and npower is a test of...duty [to keep energy secure, cheap and clean] and until there is a settled energy policy, we risk a private cartel if the merger is given approval," he said.
"GMB urges the secretary of state to exercise existing powers to prevent yet more needless price hikes that are the penalty for a dysfunctional energy market."
The GMB also said in a letter to Clark that it was worried about job cuts following the merger, which was been raised as a concern by unions Propect and Unite.
The Department for Business, Energy and Industrial Strategy said the government said it was committed to addressing sky-high energy bills, having put forward draft legislation for a price cap.
“We are aware of the decision by SSE and Npower to merge their retail customer businesses. The independent competition and markets authority is the watchdog with oversight of mergers,” a spokeswoman said.
Tony Keeling, chief operating officer of retail at SSE, defended the merger against competition concerns.
He said: “The merger will improve competition in the market by turning 60 competitors into 59, of which one offers customers a completely new model that combines the resources of established players with the agility and innovation of an independent supplier – ultimately offering better value for customers.”
SSE is the second biggest energy supplier in the UK while npower is the sixth. A combination of the two would have more domestic electricity customers than the leading supplier, British Gas. It would be second only to British Gas for gas customers.