On Tuesday (6 November) Ofgem announced the price cap will be set at £1,137, which is just £1 higher than the proposed amount.
But they said talks over the new terms of the deal will take "several weeks" and will likely see the deal delayed beyond the first quarter, although they stressed "all work" to complete the merger would continue.
The merger, a major shake-up of the United Kingdom power market that would cut the dominant big six firms to five, comes after the government ramped up scrutiny of Britain's big energy suppliers, which it has accused of ripping off customers.
The regulator said it will cap average default electricity and gas bills at 1,137 pounds a year from January 1, a level well below the most-used tariffs set by the country's big six suppliers.
In separate statements issued yesterday evening (8 November), both SSE and innogy, the parent company of United Kingdom supply firm npower, revealed that the two had entered into discussions to renegotiate the terms of the merger agreement first disclosed in November past year.
Alistair Phillips-Davies, chief executive of SSE, added: "In assessing potential changes to the commercial terms of the proposed SSE Energy Services/Npower combination, the interests of customers, employees and shareholders will be paramount".
"The impact of some recent market developments means that the commercial terms associated with the proposed combination will need to be reconsidered", SSE said in a statement.
The companies appear to have given themselves a month to fix the crisis - SSE said it would provide an update on the merger in mid-December.
The firms have made a decision to enter into negotiations to change the terms of the planned transaction, as a result of adverse market developments and regulatory interventions they think are likely to impact the creation of the combined retail company.
It said the negotiations would include talks about "potential additional direct or indirect financial contributions by each party".
Earlier this week, energy regulator, Ofgem said the cap would save 11 million customers an average of £76 a year on their gas and electricity bills. The group specifically examined competition concerns around how the deal would impact standard variable tariff (SVT) prices.
The default rates are now paid by nearly half of United Kingdom households, despite a pick-up in switching rates.