Ofgem has announced that bills are set to rise by an average of £12 a year to pay for a £24bn network upgrade. 300,000 more homes are likely to have been pushed into "fuel poverty" by Christmas, a campaign group has warned.
Energy Secretary Ed Davey said he does not want to add "a single penny" to energy bills that isn't in the public interest.
Speaking at the Fair Energy Summit in London, Mr Davey said, "I'm quite frankly fed up with commentators suggesting the Government are deliberately increasing energy bills, when in fact we are doing everything we can to reduce them".
"The bulk of the cost we add to bills is for supporting low carbon technologies and energy efficiency ... I make no apology for ensuring that we meet our legally-binding carbon targets and renewable energy targets", he added.
Ofgem's £24.2 billion investment to "upgrade and renew" the country's gas and electricity infrastructure includes funding to connect around 80,000 fuel poor households to the gas grid, "helping them benefit from cheaper fuel".
Families are considered to be in fuel poverty when they have to spend more than 10% of their incomes on keeping their homes warm.
Campaigning organisation the Fuel Poverty Action Group said that nearly half of the UK's fuel poor households are pensioners, a third contain people with some sort of disability or illness, a fifth contain a child aged five or under and one in 10 house someone aged 75 or over.
The Fuel poverty ratio is therefore defined as: Fuel poverty ratio = fuel costs (modelled consumption x price) ÷ income
In the calculation of this ratio, the fuel consumption is modelled, to ensure the household achieves the satisfactory heating regime.
Therefore, if the dwelling is actually heated to a temperature below the level defined as being satisfactory, the estimated bill for that household will be higher than the actual bill and vice versa.