Ofgem investigating two companies

The two firms are among the UK's biggest energy companies

Two of the UK's largest energy companies are being investigated by their regulator over allegations they abused their dominant market positions.

Ofgem said it had launched the study into Scottish Power and Scottish & Southern Electricity following a formal complaint from an unnamed complainant.

The investigation centres on the companies' activities in the electricity generation sector.

Both firms have denied any wrongdoing but said they would cooperate.

'Starting gun'

An Ofgem spokesman said it was not yet possible to say whether the investigations would have serious consequences.

We are confident that our actions in the electricity generation market have always been justifiable Scottish & Southern Energy

"We don't know what we're going to find... this is the firing of a starting gun," he said.

Scottish & Southern said it had not yet received any specific allegations.

"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," it said.

Scottish Power said it was confident its behaviour had been "lawful and appropriate at all times".

Ofgem said the investigation was separate from a continuing study into energy supply markets which it launched on 21 February.

'Big six'

Scottish Power has 5.2 million customers.

It is based in Glasgow and owned by Spanish energy firm Iberdrola.

Scottish & Southern is based in Perth and has eight million customers.

Its regional brands include Southern Electric, Swalec, and Scottish Hydro Electric.

Both are part of the "big six" main UK energy companies, with the other four being British Gas, Npower, E.On and EDF.