Power firms probed over allegations of market abuses

Two of the UK's largest energy firms are being investigated over allegations that they abused their dominant positions in the sector.

Scottish Power and Scottish and Southern Electricity are being scrutinised by industry watchdog Ofgem about their activities in the electricity generation sector following a formal complaint from an unnamed party. Both companies have denied any wrongdoing.

Chris Lock from Ofgem commented: "It's too early a stage to say what we will find, but we have got grounds to investigate them."

Scottish and Southern has announced that it will "co-operate fully" with the process. A spokesman said: "No specific allegations have yet been put to SSE, but we are confident that our actions in the electricity generation market have always been justifiable in economic terms and consistent with the operation of a competitive market."

Simon McMillan from Scottish Power said he was confident the company's behaviour had been "lawful and appropriate at all times".

Ofgem emphasised that the investigation, launched under the Competition Act, is completely separate from the probe into the energy supply markets which the regulator initiated on 21 February.