Energy regulator Ofgem has proposed that the nation's biggest utilities auction up to a fifth of their electricity generation, as it tries to break their control over the market.
Ofgem said its review found competition was being "stifled" by a combination of tariff complexity, poor supplier behaviour, and lack of transparency.
"Further, the degree of influence the big six assert on the retail market has not diminished since Ofgem's 2008 probe," the regulator said.
Britain's big six utilities include Scottish and Southern Energy, Centrica, Iberdrola's Scottish Power, RWE npower, EDF Energy and E.ON UK, which recently sold its UK power networks to US power firm PPL.
Chief Executive Alistair Buchanan said Monday's move would increase price transparency and make it easier for new players to enter the retail market.
"The energy supply companies have eight weeks in which to engage constructively with Ofgem's proposals," Chairman Lord Mogg said in a statement. "If firms frustrate reforms they risk ending up at the competition commission."
Ofgem also announced an investigation into Scottish Power and said it is exploring whether it needs to bring similar actions in the non domestic market.
City A.M. Reporter