SCOTTISH Hydroelectric owner SSE has insisted the controversial plan to merge its retail arm with npower could deliver big benefits for consumers after winning clearance for the deal from regulators.

Unions and consumer groups have expressed concern about the impact of the deal on gas and electricity prices and on jobs.

However, the Competition and Markets Authority said it had decided the merger could proceed following a thorough review which failed to identify any concerns

The CMA gave the merger provisional clearance in August after focusing on how the tie-up would affect competition for customers whose energy bills are based on standard variable tariffs (SVTs), which are more expensive than fixed price deals.

“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,” said the chair of the CMA’s inquiry group, Anne Lambert, yesterday

SSE chief executive Alistair Phillips-Davies welcomed the decision, noting: “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.”

The CMA’s decision will pave the way for SSE’s retail arm to be spun off into a new business that includes the npower operation, currently owned by Germany’s Innogy.

Perth-based SSE plans to focus on power generation and related infrastructure.

The company hopes the retail merger will complete by its financial year end on March 31. SSE shareholders will own 65.6% of the new retail business.