Britain's second biggest energy supplier SSE announced it was freezing gas and electricity prices until 2016, saying they agree with the Labour leader Ed Miliband's plans.
The freeze comes amid a major investigation into the huge profits generated by the energy sector.
The company also announced it was cutting back on renewable energy investment and said 500 staff would lose their job.
ITV News Business Editor Joel Hills reports:
The boss of energy firm SSE announced the company would be freezing prices today, saying he agrees with Ed Miliband, after losing several hundred thousands of customers.
The move prompted an argument inside the House of Commons as Ed Miliband and David Cameron each claimed credit for the move. Other companies are expected to follow, as Business Editor Joel Hills reports.
The boss of SSE has dismissed claims that his company's price freeze was timed deliberately to come just before a possible inquiry into the energy market.
The energy regulator Ofgem is widely expected to announce a probe into the whole industry, with firms' billing practices set to come under the spotlight.
But Alistair Phillips-Davies told ITV News his firm had been planning to announce a price freeze for "several weeks".
The chair of the House of Commons energy committee has questioned the impact SSE's promise to freeze prices will have on the energy market.
Tim Yeo said he was worried about companies reducing investment in renewable energy if they think lower bills will hit their profits.
– Tim Yeo MP, Chair of the energy committee
At first glance SSE's price freeze appears to be welcome news for consumers, but it follows several years of above-inflation price hikes and SSE's tariffs may still not be the most competitive on the market.
The announcement that SSE is also cancelling investment in four offshore wind farms highlights the potential dangers of any promises to freeze the energy market.
Britain may well find itself facing an investment shortfall if this policy is pushed through. If that happened, it could aggravate the coming crunch in generating capacity and increase the risk of black-outs in future."
Labour leader Ed Miliband claimed the Government's arguments against an energy price freeze have been "totally demolished" by ministers' backing for SSE's own version of the policy.
At Prime Minister's Questions, the Labour leader leapt on the proposal from the Big Six firm to freeze its prices until January 2016.
He asked David Cameron: "Would we be right to assume that the Prime Minister believes that this price freeze is unworkable, impossible to implement and probably a communist plot?"
However, the Prime Minister insisted measures to cut green tariffs were part of the Government's economic plan and insisted the policies were working.
The boss of the energy firm SSE has told ITV News that Ed Miliband "certainly changed the way people look at the energy market" after the Labour leader vowed to freeze energy prices if he won the election:
The boss of the energy firm SSE has told ITV News' Business Editor Joel Hills he supports Labour leader Ed Miliband's pledged to freeze prices if he came to power:
"We agree with Ed", SSE boss agrees @ed_miliband speech last Sept a defining moment. "Changed the way people look at the energy market"
Boss of SSE tells me that in the last year he has lost "several hundred thousand customers".
Deputy Political Editor Chris Ship is watching Prime Minister's Questions:
Ed Miliband claims SSE price freeze shows he was right to call for it last year. Cameron claims SSE doing it cos govt removed green tariffs
Cameron uses EdM difficulties in his answer: They support him in here then brief against him outside #pmqs
Tory MPs shout "weak" at Miliband. Lab leader retorts "I'll tell them what's weak- it's not standing up to energy companies" #pmqs