Energy supplier SSE is freezing its gas and electricity prices until 2016.
The UK's second largest energy supplier is the first of the Big Six firms to make such a move, which comes just one day ahead of regulator Ofgem's report into whether or not there needs to be a full investigation into the energy market.
SSE said it expects the price freeze will lower its profits and that in order to cut costs of around £100 million it will shed around 500 jobs and reduce its investments in offshore wind farms.
Last year, all of the Big Six were severely criticised for increasing the costs of gas and electricity. In response, the government cut the cost of green levies in an effort to lower the cost of bills, while Labour leader Ed Milliband pledged to freeze prices for home and businesses for 20 months if it wins the next General Election.
Alistair Phillips-Davies, chief executive of SSE, said: "With today's announcements we're recognising that delivering the lowest possible energy prices for our customers has to be central to everything we do.
"We're responding to the questions that have been asked of us with a positive agenda for customers, including the longest ever unconditional energy price freeze. To help us achieve that, we're making sure our own house is in order by streamlining and simplifying our business.
"We're doing our bit but we don't want to stop at 2016. So today we're making clear once again that we wish to work with people to find more ways of taking costs out of energy bills and, more specifically, to make sure the cost of energy taxes is paid for fairly in a way that is proportionate to people's income and protects the vulnerable.
"In all of this, I hope that people will start to recognise SSE is not part of the problem but part of the solution."
Pressure on providers
Clare Francis editor-in-chief at MoneySuperMarket said the move could see other suppliers follow suit.
"SSE's price freeze puts real pressure on the other providers to respond in some way and it's interesting to see the announcement just a day before Ofgem is due to report back on its inquiry into the energy market," she said.
"The political spotlight is on the energy industry at the moment and it would not surprise me if we see other firms act to try and quash feelings that this is a market that is broken and not working in the customers' interests.
"However, while nine million SSE customers breathe a sigh of relief this morning, those paying the provider's standard prices could still save money by switching to a cheaper tariff. What's more, they can do this and still be protected from price changes."
Ann Robinson, director of consumer policy at uSwitch.com, added:
"This is a U-turn to be applauded. SSE was the last supplier to pass on the government's levy cuts and reduce customer bills this winter - now they are the first to freeze prices until 2016. We welcome this commitment.
"After another winter of rationing heating and hot water to cope with rising bills, SSE customers have at last been offered the peace of mind they desperately needed. It's our hope that the remaining big five energy firms follow SSE's lead and look at ways to offer consumers the same reassurance."
SSE added it would be separating its retail and wholesale business by March 2015 so it can "improve transparency" for customers as well.