Energy company SSE said it is freezing electricity and gas prices for its customers until 2016, after it announced an 8.2% energy price rise back in October.
The firm said that by cutting hundreds of jobs and shelving three offshore wind farm projects, it should be able to save up to £100 million.
It argues that the price freezing has been made possible by the government lowering taxes on bills, which had already allowed the company to cut dual fuel bills by 3.5% after the increase. The deal will be offered to customers on the standard tariff between March 26 and January 1 2016.
SSE’s CEO Alistair Phillips-Davies told the BBC, “We’re looking to do whatever we can to bring down prices for consumers.
“I hope that people will start to recognise SSE is not part of the problem but part of the solution”.
Energy secretary Ed Davey welcomed the news, saying that this shows the usefulness of the government’s moves to increase competition and keep energy bills low.
“This shows that the Big Six are starting to realise they need to take big action if they want to keep their customers, who have been switching supplier in record numbers”, Davey said, adding that customers of other suppliers should ask other firms to follow suit.
“SSE have shown today that the big energy firms are able to cut their costs and profits, and be confident about their ability to weather potential uncertainty in the wholesale markets, to give billpayers long-term price security”, he added.
Labour leader Ed Miliband sparked a debate last September, when he announced that his party would have frozen energy prices if elected, in order to help consumers face the “cost of living crisis”.