The energy price cap is going to fall in October - but the boss of Ofgem has warned families are "absolutely going to struggle" with their bills this winter.
A typical household paying by direct debit for gas and electricity will face an annual charge of £1,923 from October to December, a fall of about £150.
Despite that, millions of households could end up paying more because government support with bills - worth £66 a month - has now been withdrawn.
Speaking to Sky News, Ofgem chief executive Jonathan Brearley said it would be "helpful" if these subsidies were reintroduced by the government.
And he stressed that the regulator, the government and suppliers must work together to give vulnerable customers the support they need.
Downing Street has faced growing calls to explore alternatives to the price cap, such as a social tariff that would give cheaper gas and electricity to those in need.
Andrew Bowie, parliamentary undersecretary of state for nuclear and networks, told Sky News that the government "will consider any and all options moving forward".
When asked whether the price cap will be looked at again, Mr Bowie said: "Over the period of its existence, the price cap has yielded hugely positive results for the British people.
"However, it is right that when times change, circumstances are looked at again, which is why we have a call for evidence open right now, which is why we're reviewing how the energy market works in this country as a whole.
"We are determined to get it right moving forward."
Citizens Advice has warned this winter could be "as bad, if not worse" than the last - and a record number of people are already behind on their energy costs.
Calling for the government to step in quickly with targeted support, it said: "The next few months will push households like these over the edge."
Experts have warned that bills could head back above the £2,000 mark early next year.
Price cap changes announced
The price a supplier can charge for gas is falling from 6.9p to 6.89p per kilowatt hour (kWh) - with the cost of electricity dropping from 30.1p per kWh to 27.35p.
Weaker wholesale prices have led to this reduction - and Ofgem says the market is stabilising, with suppliers returning to a healthier financial position.
The price cap would have been lower still, by a further £100, if it had reflected a looming Ofgem calculation that gives a nod to reduced energy use.
The regulator has also unveiled measures to reduce costs for prepayment meter customers - alongside extra support for those at risk of disconnection from the network.
But there has also been a small increase to the earnings that energy firms can make per household - an extra £10 a year - most of which is ringfenced in the event of a supplier failure.
Ofgem says that, at the peak of the energy crisis, 30 suppliers went bust because they didn't have enough capital in reserve to stay in business - adding £83 to the bills of all customers.
An 'encouraging' fall
Household consumption has fallen sharply following the bill shocks of the past 18 months.
Energy Security Secretary Grant Shapps described October's fall in the price cap as "encouraging" - and claimed it was another milestone in the government's promise to halve inflation.
"We are successfully driving Putin out of global energy markets so he can never again hold us to ransom, and we are boosting our energy independence to deliver cheaper, cleaner and more secure energy to British homes," he added.
But Labour's shadow energy and net zero secretary, Ed Miliband, claimed the latest price cap announcement "demonstrates the scandalous Tory cost of living crisis is still raging for millions of people".
He claimed the government was siding with oil and gas companies making record profits, adding: "Higher energy bills are unfortunately here to stay under the Conservatives, even with this fall, bills are significantly higher than they were only three years ago."
The next price cap announcement - covering January to March 2024 - will be made in three months' time.
Read more:
Cost of living latest - as supermarket cuts prices
How will energy price cap affect your bills?
'Millions' will pay more
A thinktank has declared millions of the poorest households will pay more despite the price cap cut.
The Resolution Foundation blamed the withdrawal of energy support schemes and a rise in charges added to bills.
The price cap - which applies to England, Wales and Scotland - sets a limit on the amount suppliers can charge for each unit of gas and electricity used and for the privilege of being connected to the energy network. The more you use, the more you pay.
Even at the reduced cap mark, it remains about £800 above 2019 levels at a time when families are dealing with high inflation and higher housing costs - mostly as a consequence of interest rate rises by the Bank of England intended to dull the pace of price rises in the economy.
Ofgem has said it now expects suppliers to continue improving service and support their most vulnerable customers.
David Cheadle, chief operating officer at the Money Advice Trust, said it is an "extremely worrying time" for households struggling to keep up with their bills - and many consumers will face "impossible choices without further support".
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2023-08-25 08:48:45Z
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