ScottishPower will reduce the price of its dual-fuel bills by 3.3%, or £42 a year from the end of the month after the government cut green levies on energy firms.
The average standard tariff will now be £1,284 from 31 January, down from £1,325. The company said the reduction would benefit 2.2 million dual fuel customers, who will also receive a £12 rebate in the autumn.
While customers will welcome the price cut, in December the energy provider increased its prices by an eye-watering 8.6%.
ScottishPower is now the fourth of the Big Six energy firms to announce lowering its prices after the cut to green levies - after British Gas, EDF and Eon. SSE and npower are now the only two left to announce how much they will cut theirs.
Neil Clitheroe, chief executive of energy, retail and generation at ScottishPower, said: "Following the government's recent announcement on reducing the impact of green and social levies on consumer energy bills, we will be passing these cost reductions on to customers this month. We are pleased that the government has taken sensible measures to curb these rising costs."
However, Mark Todd, director of EnergyHelpline, believes the cut isn't deep enough: "In October, ScottishPower announced a price rise of 8.6%, which put millions of its customers in a tailspin, worried about whether they could afford to heat or even eat at Christmas.
"Today's announcement only takes around £40 off the price rise so whilst it's in the right direction, it won't make a huge amount of difference to households."
Meanwhile, Tom Lyon, energy expert at uSwitch.com, called on the last of the Big Six to announce price cuts to get on with it.
"While it's great news that ScottishPower has finally told its customers about the reductions they'll be enjoying on their energy bills, SSE and npower's customers are still left in the dark and struggling with sky-high energy costs.
"We strongly implore suppliers to not only offer relief soon but also to backdate any reductions so that consumers can feel the benefit during the coldest months of the year."