How have the Big Six energy companies benefited from vertical and horizontal integration?

Vertical integration refers to the combination, within a single firm, or two or more stages of production, where each stage was previously undertaken by separate firms. For example, a vertically integrated energy company might both generate electricity and operate a consumer business marketing and selling that electricity. Horizontal integration refers to the combination, within a single firm, of producing multiple goods at a single stage of production where previously only a single good was produced. For example, a horizontally integrated energy company may generate electricity both through nuclear fission and wind turbines (having purchased a wind-power company). It’s clear that the Big Six, the six dominant energy suppliers, have vertically integrated: the same firms that fit meters and deal directly with customers also now produce the energy they sell. It’s clear that many of these firms have also horizontally integrated: many electricity suppliers now also sell gas and other utilities. Vertical integration improves firm efficiency: costs are reduced because there are no profit-making intermediate suppliers, enhancing profits for the integrated firm. Horizontal integration also furthers the potential for generation of profit: for reasons of convenience, many consumers would rather purchase all their utilities from a single firm. These consumers may be fairly unresponsive to price rises because of brand loyalty and inertia.