Ofgem can manage transmission constraints - when the transmission system cannot reliably transmit power from where it is generated to where demand is - by telling generators to reduce their output by accepting bids in the balancing mechanism used to balance electricity supply and demand.
When there are transmission constraints, power generators should be willing to bid down so that their prices are not excessively expensive.
Ofgem said it will investigate whether SSE Generation and EP SHB submitted bids which were too expensive.
"The opening of this investigation does not imply that Ofgem has made any findings about non-compliance," Ofgem said.
(Reporting by Nina Chestney; editing by Jason Neely)