Energy regulator Ofgem has announced plans to control electricity pricing for the next eight years from April 2015.
The watchdog says the move will lead to a £12-a-year reduction in household bills.
The proposals, which will be consulted upon for eight weeks, will affect five out of the big six energy companies: UK Power Networks, Northern Power Grid, SP Energy Networks, SSE Power Distribution and Electricity North West.
Ofgem said in a statement: "Today's announcement is all part of our consistent drive to get the best deal for consumers while maintaining a stable regulatory regime which attracts investment as cheaply as possible."
The regulator said the cut was achieved by savings of £2.1bn from the redrafting of the companies' business plans last year.
Initially the five companies' proposals were returned after Ofgem deemed they failed to give customers value for money.
The sixth company, Western Power Distribution, was the first to have its price control agreed after the regulator approved its business plan last November.
Under the proposals £17bn will be spent on upgrading and maintaining Britain's local electricity network.
Ofgem said that in addition to investment it had "challenged the companies to improve customer service and take a more active role in helping vulnerable customers."
It added companies that fail to do this will face penalties.
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