British Gas owner Centrica has come under pressure to cut bills after watchdog Ofgem pointed to falling wholesale gas and electricity prices.
Customers are paying higher tariffs this year after they were hiked 9.2% last autumn, though the rise was scaled back following the Government's shake-up of so-called green levies on bills.
But Centrica said the average bill was expected to be £90, or 7%, lower this year reflecting warmer weather and energy efficiency measures.
The company reiterated that tariffs were not expected to change during 2014 "recognising competitive conditions in the UK energy supply market".
Centrica has defended its stance by pointing to the way it buys much of its energy in advance and that the benefit of lower wholesale prices for next year is offset by higher costs elsewhere.
British Gas owner Centrica has reported pre-tax profits of £890 million for the first half of 2014, a drop of 40% from 2013.
The company said the fall reflected a changing market environment and the effects of mild weather in the UK and the polar vortex in North America.
ITV News Business Editor Joel Hills tweeted:
Mild weather in UK and polar vortex in US dents Centrica's profits. Owner of British Gas made H1 pre-tax profit of £890m - down 40%.
Operating profits for British Gas residential energy supply fell by 26% to £265 million for the first half of the year, owner Centrica has announced.
British Gas has denied claims it paid its staff bonuses to inflate customers' bills.
According to the Daily Mail, a former employee said the policy encouraged staff to target charities and small businesses, with workers told they could triple their salary through commission if they sold enough of the most expensive deals as possible.
A British Gas spokeswoman said: "British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers. This is a highly regulated and competitive market, every part of the sales negotiation process for business customers is closely monitored.
"We take very seriously any concerns raised by employees or customers, and our processes, as well as sales agents' terms, are regularly reviewed to ensure they are fair and appropriate."
British Gas have responded to an Ofgem investigation where they were found to have wrongly blocked businesses from switching to new suppliers.
British Gas Business say they have "agreed to a penalty of £800,000 and will invest at least £3.45 million in an energy efficiency".
We have compensated all our current customers affected by this issue and we are in the process on contacting and compensating affected customers who have since moved to other suppliers.
Stephen Beynon, Managing Director of British Gas Business also said:
We’re sorry these errors occurred and have worked swiftly to change our computer systems and processes, putting controls in place to stop this happening again.
We take any failure to meet our obligations very seriously and will ensure that the new energy efficiency fund we have set up will be a real help to hundreds of small businesses.
British Gas will pay £5.6m after being found to have wrongly blocked businesses from switching to new suppliers.
The energy giant's computers and practices "failed customers", regulator Ofgem said. Some small businesses were the worst hit by the practices.
There will be anger that once again an energy company's actions have fallen so far short of it's promises to do it's best for hard pressed customers.
British Gas is Britain's biggest energy firm with thousands of staff - yet says it has "nobody available" to appear on ITV News to explain its latest failings to customers.
As I said to their press office, "shame on British Gas".
The chief executive of Centrica, which owns British Gas, has welcomed the major competition inquiry into energy firms but said a lengthy review could damage investment when the market's "security is being seriously challenged."
Sam Laidlaw said: "Anything that clears the air and helps rebuild trust in the industry must be a good thing. Britain's energy market is highly competitive and we believe that a full independent review by a respected regulatory authority would demonstrate precisely that.
"Competition is working, providing choice for consumers and some of the lowest prices in Europe.
"We hope that a lengthy review process will not damage confidence in the market, when over £100 billion of investment in new infrastructure is needed.
"A prolonged period of uncertainty could damage investment at a time when Britain's energy security is being seriously challenged."
British Gas has announced it will cut its duel fuel energy bills by an average of £53 from 1st January, but its customers bills will still be higher than last year:
Bills still up compared to last year, but British Gas reversing part of its planned 9 percent price increase
British Gas announced it is to cut dual fuel energy bills by an average of £53 from 1st January.
The British Gas 10.4% price increase is the latest in a line of winter bill rises from the "big six" providers over the past week:
- SSE increased prices by around 8.2%, impacting 7.3 million customers
- EDF Energy revealed plans for a 3.9% hike. Less than half the increase of its rivals, the firm chose not to pass on the costs of green levies - in anticipation of them being scrapped
- Co-operative Energy also scaled back its price increase from 4.5% to 2%.
- German-owned E.ON has warned that tariff rises are "increasingly likely" and is reportedly planning to announce a new year rise later this month.