The distribution arm of East Midlands, which operates the local network of wires, is being slimmed down from 23 separate sites into one central headquarters and five regional centres.
PowerGen did not say how many job losses were likely. Analysts estimate that the headcount could be reduced by 300, or 10 per cent of the workforce.
There will be a major rebranding exercise to replace the East Midlands name with PowerGen's brand, involving repainting vans and reprinting bills and stationery.
News of the overhaul came as PowerGen said that the sale of its two coal- fired stations, Fiddler's Ferry and Ferrybridge, would reduce profits by pounds 60m a year.
The reduction will be offset exactly by lower gas costs after the renegotiation of supply contracts for its Connor's Quay gas-fired plant in North Wales.
PowerGen shares slipped by 2.5 per cent to 867.5p as the group said that the mild weather and lower power station payments helped reduce profits in the nine months to 3 January from pounds 376m to pounds 292m. This was despite an pounds 87m contribution from East Midlands. In December alone the reduction in generating profits was pounds 40m, and in January and February the impact was about pounds 20m a month.
The mild weather has reduced demand, creating a high level of plant availability and reducing the size of the capacity payments generators earn.
Fiddler's Ferry and Ferrybridge made operating profits of pounds 143m in the financial year to last April, and PowerGen expects the sale of the stations to raise between pounds 1bn and pounds 1.5bn. The sale will reduce PowerGen's share of the generating market to 14 per cent.
Ed Wallis, chairman, said the group aimed to increase its overseas generating portfolio from 8,000 megawatts to 10,000 megawatts, and is interested in buying existing power stations in Australia, Thailand, India and China.