Energy firm SSE is to be investigated by Ofgem over concerns that it restricted competition in the electricity connections market.
The government regulator has voiced concerns over how sites not yet connected to the grid choose where they get their power from.
The regulator said it had also found evidence that SSE may have breached competition law.
Ofgem will now examine whether SSE put its competitors at a disadvantage.
Customers who are not yet connected to the electricity grid, such as new housing developments, can choose who they get their electricity connection from, with the option to select an alternative, independent connection provider rather than the local distribution company.
Publishing the findings of a six month review into the electricity connections market, Ofgem said: "While we have seen more progress over the last five years to increase competition, the network company remains the sole provider for a number of key parts of the connections process."
Ofgem opened the review into the market for new connection in response to concerns about whether competition in the market was effective.
The watchdog invited responses from the public, carried out customer research and met a broad range of connection providers.
The review also identified differences in how connection services were provided across Britain.
Code of Practice
Ofgem suggests network companies commit to an enforceable code of practice which would "level the playing field for competitors by reducing their reliance on the local electricity network companies".
The regulator said it was expecting electricity distribution network companies to confirm their commitment to the code by 18 February 2015.
Ofgem's senior partner for distribution, Maxine Frerk said: "We are requiring electricity network companies to work quickly to resolve the issues identified in the connections market, to reduce the hassle of getting connected to the grid and help lower costs for customers.
"We are determined to ensure this part of the energy market works in customers' interest and will use the full range of our powers to do so."
Ofgem, however, stressed that the fact it had launched an investigation did not in itself imply that SSE had breached competition law.
A spokesman for SSE said: "We acknowledge Ofgem's announcement of an investigation into its distribution business' provision of electricity connections services in central southern England.
"SSE will co-operate fully with the investigating authorities and will not make any further comment until the investigation is completed."