The firms could face fines of up to 10 per cent of their turnover if found guilty.
A statement by Ofgem said it was undertaking the investigation under Section 18 of the Competition Act 1998 and Article 82 of the EC Treaty.
A spokesman said: “This decision was based on a formal complaint alleging abuse of a dominant position in the electricity generation sector arising from constrained capacity on the transmission network, as well as informal enquiries.
“This Competition Act investigation is completely separate from the probe into the energy supply markets which Ofgem launched on February 21 2008.”
Both companies are energy suppliers and generators and it is believed the investigation will look at whether either have profited in “bottlenecks” in supply.
An SSE spokesman said: 'No specific allegations have yet been put to SSE, but we are confident our actions in the electricity generation market have always been justifiable in economic terms and consistent with the operation of a competitive market.
'With any Competition Act investigation there is a process to be followed and we will cooperate fully with Ofgem throughout this process in order to bring it to a speedy conclusion.'
Scottish Power said: “We are confident our participation in the constrained market has been lawful and appropriate at all times and we will, of course, fully cooperate with Ofgem’s investigation.”
Ofgem has recently been keen to act decisively over anti-competitive behaviour. National Grid was fined £41.6 million earlier this year after being accused of hampering the roll out of smart metering. National Grid is appealing against this decision.