The official competition watchdog, the Competition & Markets Authority (CMA), wants to overhaul the gas and electricity markets to make it easier for households to switch and save money.
It points out that average customers could save £300 a year by switching to a cheaper deal. Such savings are available immediately to those who switch to a cheaper tariff today.
But, according to the CMA, says 70% of domestic users are languishing on expensive standard variable tariffs (SVTs) with the Big Six suppliers (British Gas, EDF, Eon, Npower, Scottish Power & SSE).
The CMA says customers are paying £1.7 billion a year more for energy than they would in a competitive market, which would see the Big Six and the growing number of smaller independent suppliers battling for your business with keener prices and improved customer service.
Switching makes sense
The CMA report says households could already benefit by switching tariff: "There are already plenty of competitive deals out there. What we need to do is persuade customers to take them up."
One way to do this, it says, would be to allow rival suppliers to contact so-called 'disengaged' customers who have been on their suppliers default SVT for three or more years.
The watchdog is also proposing changes to help price comparison websites, such as MoneySuperMarket, to contact customers with special offers, and to negotiate exclusive deals with suppliers.
Crucially, there is a proposal to remove the controversial '4-tariff' rule, which limits the number of deals each supplier can offer.
And a 'safeguard' price has been mooted as a way to protect customers with prepayment meters, reducing their bills by a total of £300 million a year.
Stephen Murray, MoneySuperMarket's energy expert, said: "These recommendations are a positive step towards helping UK households save money on their energy bills. Removing the 4-tariff rule should provide consumers with more choice, clearer differentiation between suppliers and increased switching opportunities.
"We welcome the recommendations but switching from a SVT to a fixed-rate tariff still remains the quickest and best way to save money on your energy bills, with fixed rate deals offering an annual average saving of around £340 for a typical household."
The CMA's provisional decision on remedies for the 'broken' energy market are now open for response, with a further report due in June.
Stephen added: "While we wait for the measures to be determined and implemented, it is worth restating that savings running into hundreds of pounds a year are available NOW to those who switch from a standard rate to a competitive fixed rate tariff."
Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.