Britain's energy watchdog on Thursday proposed a temporary price cap on gas and electricity that could benefit 11 million households, notably the most vulnerable exposed to excessive cost hikes.
The table below from Ofgem shows the proposed average level of the default tariff cap, and the typical standard variable tariff savings for direct debit and standard credit customers for the largest energy firms (click for larger image).
The planned cap will be confirmed in November and come into effect at the end of the year.
"Customers will be assured they're paying a fair price for their energy", Ofgem Chief Executive Officer Dermot Nolan said on BBC Radio 4.
The Domestic Gas and Electricity Act became law in July, compelling Ofgem to enforce energy suppliers to comply to a cap on tariffs.
"Consumers can have confidence that falls in energy costs will be passed on to them and if costs increase, Ofgem will ensure that any rise will be due to genuine increases in energy costs rather than supplier profiteering". "Meanwhile, Ofgem will continue with reforms which aim to deliver a more competitive retail energy market which, combined with protection for those who need it, works for all consumers".
The level will be refreshed every six months and, like Ofgem's "safeguard tariffs" which were recently hiked, could go up or down depending on fluctuations in cost.
Since April, Scottish Gas owner British Gas has raised its price twice - adding a total £104 to the average bill.
Centrica said: "Since the announcement of the CMA investigation into the functioning of the United Kingdom energy market over four years ago, our focus has been on making proposals to improve the functioning of the market for the benefit of customers".
Industry watchdog Ofgem is bringing in a price cap that will limit energy companies to charging no more than £1,136 a year.
Chief executive Lawrence Slade said: "There are over 70 suppliers in the energy market who will now be assessing how this impacts their individual business".
Stephen Murray, energy expert at MoneySuperMarket, suggested there was an element of "political soundbite" to Ofgem's price cap announcement, and that the were already options in place for customers to save on energy bills now.
Business and Energy Secretary Greg Clark said the cap will put a stop to the exploitation of loyal customers, saying the Government "is delivering on its promise to end that injustice and protect households across the country from unjustified price rises". "The best way to drive down prices is to increase competition through regular switching".
Nevertheless, the company reiterated its position that caps were not sustainable for the United Kingdom energy market. The findings May to introduce cap for the price of what she called "rip off" contracts.