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Co-operative Energy has promised a reduction in a proposed price increased announced last month.
Rather than a 4.5% increase, the energy provider will now raise average bills by 2.5% in response to a "clear indication" that the government will remove mandatory "green taxes" on household bills, the firm said.
“If ultimately we have misread the signals and social taxes remain in place for next year we will have no alternative but to review this decision but at least our customers will have benefited over the difficult winter months," group general manager Ramsay Dunning added.
Energy giant SSE insisted it was battling "difficult" energy market conditions as it revealed a £115.4 million loss in its retail supply business just weeks after announcing a hike in household bills.
The group, which has more than nine million customers and is the UK's second largest generator of electricity, blamed the performance on rising costs of wholesale energy, environmental and social policies and distribution.
Its overall underlying group profits fell 11.7% to £354 million in the six months to September 30.
The first half loss in its retail supply arm compares with a £48.3 million operating profit a year earlier.
SSE was the first of the major suppliers to announce a tariff rise, saying last month that it would lift prices by an average of 8.2% from Friday.
The Treasury estimates that at least two-thirds of the £310 billion of planned infrastructure investment over the next decade and beyond will come from private companies paid for, ultimately, by consumers through their utility bills.
The National Audit Office said that such high levels of planned investment meant that the increases in charges for energy and water were now expected to continue to outstrip inflation until 2030.
The Department for Energy and Climate Change (Decc) has estimated that energy bills could go up by 18% in real-terms increase over that period - although the NAO said its calculations covered just three-quarters of the investment in the Government's National Infrastructure Plan.
Consumers face another 17 years of above-inflation increases in energy and water bills as households are forced to stump up the cost of renewing Britain's ageing infrastructure, the Whitehall spending watchdog has warned.
The National Audit Office (NAO) said the Government had little idea of the impact the continued price hikes would have on households or whether they would they would even be affordable, particularly for those on the lowest incomes .
Its findings will intensify the political debate raging over energy bills, with the Government under pressure to act after Labour promised a 20-month price freeze if they came to office.