TORONTO - The Liberal government will announce plans Wednesday to merge two of Ontario's large electricity agencies.

Sources say Energy Minister Chris Bentley will announce the government will merge the Ontario Power Authority and the Independent Electricity System Operator.

Both are planning agencies and do not produce or distribute electricity to consumers.

However, industry sources say the merger could be difficult because the IESO is unionized and the OPA is not.

The Liberals have promised to review what is often called "the alphabet soup" of energy agencies in hopes of finding efficiencies.

The New Democrats called on the government to "boost long-term competitiveness by ensuring that the mandate of the government's electricity review is focused on agency consolidation" as part of their budget demands.

A government source said the merger will "save money for ratepayers, improve our budget, and it is an area of mutual concern between both parties."

It should also appeal to the Opposition.

Progressive Conservative Leader Tim Hudak had vowed to shut down the Ontario Power Authority during last year's election campaign.