By David Clement
The big six energy companies have told the government they will pass on savings of a shake-up on green levies which could shave up to £50 off bills.
Chancellor George Osborne has promised to reduce the costs of some energy efficiency schemes in this week's Autumn Statement.
Energy suppliers give benefits to customers
And the coalition said all the major energy suppliers have pledged to pass the benefits to their customers.
The reduction in individual household bills will depend on the energy supplier, the government said.
RWE npower chief executive Paul Massara said: "As a result of this announcement we will reduce our bills.
"We are currently calculating how large this reduction will be, and can assure our customers that it will fully reflect the reduction in the costs to our business."
He added: "In addition, in order to give our customers greater certainty with their household budgets, we don't plan to increase energy prices before spring 2015.
"That is unless there are increases in wholesale energy costs or network charges."
Energy saving offer for homebuyers
The proceeds from a fresh crackdown on tax avoidance have been earmarked for a scheme which will offer homebuyers £1,000 to spend on energy saving measures.
Other proposals include a government-funded rebate saving the average customer £12 on their bill for the next two years, according to the Department of Energy and Climate Change.
A plan to cut the cost of the Energy Company Obligation (ECO), an insulation scheme delivered by major energy suppliers, could shave an average £30-£35 off bills next year.
The coalition said electricity companies were willing to take voluntary action to reduce network costs in 2014/15, funding a one-off reduction of around £5 on electricity bills.
Typical home to save £50
Overall, the typical household will save £50 on their energy bills, said Energy Secretary Ed Davey.
He said: "It is a complicated package but the key thing for people listening is that the typical household will save £50."
Critics have suggested that a saving of about £6 a month will make little difference to households, who face an average annual dual-fuel bill - covering gas and electricity - of £1,315.
But Mr Davey insisted: "I think people will welcome this."
He said: "We are trying to do everything we can and we want the energy companies to do everything they can.
"To make sure they are doing that, we have got some really stiff proposals on competition to make sure that the independent suppliers can come and compete with Labour's Big Six."
Government plans will help households
Kate Rose, head of energy at Confused.com said: "The news today of the government’s plans to reduce the costs on suppliers will go a long way to helping households.
"However, the key as always will be in the detail.
"While it’s encouraging to hear that several of the larger suppliers have promised to pass on the cost savings to consumers, we urge the other suppliers to follow suit as soon as possible.
"With millions of households impacted by the recent price rises, suppliers need to not just promise reductions.
"They also need to be as transparent as possible so that consumers are aware of what any changes will actually mean for them.
"Although this news looks set to reduce our bills, for those households that have been with the same supplier for many years there still could be greater savings to be made by switching.
"We encourage consumers to continue to shop around for the best deals."