Energy Secretary Ed Davey has urged the energy regulator to look into the profits being made by the 'Big Six' energy companies made through supplying gas.
The Liberal Democrat urged Ofgem to examine whether their profit margins - in some cases five times higher for gas than for supplying household electricity - should be the subject of an investigation.
If such an investigation was to find evidence of a monopoly, it could result in a company being broken up.
Davey claimed gas made up two-thirds of the energy bills of households connected to the grid and that if profit margins for gas came down to a similar level to those in the electricity market it could save every household £40 per year.
The recommendation came in a letter to Ofgem chief executive Andrew Wright, in which Mr Davey singled out British Gas.
He said there was evidence the company, which has the greatest share of the domestic gas market, had tended "to charge one of the highest prices over the past three years, and has been on average the most profitable".
Energy Secretary Ed Davey told ITV News the Government will "seriously investigate" launching a three-digit phone number for people who lose power during severe weather events to get up-to-date information.
Following a meeting with energy distributors, Mr Davey said he was "confident" they had worked as hard as they could to reconnect homes and businesses over the Christmas period.
Despite praising the firms, he added, "We are really clear there are things that could have been improved, done have been done better, so we have agreed that there will be a review that we will lead over the next two months .... to look at issues like communication".
Energy Secretary Ed Davey is due to meet representatives of power distribution companies later today to discuss the power outages over the Christmas period.
More than a million homes and businesses were cut off over the entire period, including 100,000 on Christmas Eve.
Last week, the energy regulator Ofgem has told ITV News that power networks could face fines if it is proved that they failed to respond quickly enough to reconnect customers.
Energy Secretary Edward Davey called E.ON's price rises announcement "disappointing news".
Bur Mr Davey stressed:
This rise is ... lower than it would have been as a result of Government action to reduce the impact of price rises on consumers.
As part of their announcement today, E.ON have confirmed they will pass on these savings to their customers.
This does not let energy companies off the hook.
The coalition has unveiled measures it says will knock £50 off the average energy bill, but some of that cost will be absorbed by taxpayers.Read the full story ›
The main measures confirmed in Ed Davey's Energy Statement are as follows:
- Government will provide £300m in both 2014 and 2015 - £600m in all - for a new rebate to all domestic electricity customers worth £12 each year
- It will consult on reforming the Energy Companies Obligation to make it cheaper, knocking £30-35 off average bill next year
- The Affordable Warmth and Carbon Saving Community Obligation - schemes which help low-income and vulnerable households - will be maintained at current levels and extended until March 2017
- The electricity distribution network operators will make voluntary improvements worth £5 from the average energy bill
He says these measures combined will result in saving worth £50 on the average energy bill.
Ed Davey says that changes to the Energy Companies Obligation - which drives energy-efficiency measures - will knock between £30 and £35 off the average bill next year.
Energy Secretary Ed Davey gets a lively reception in the House of Commons when he says: "It is right that the government keeps these social and environmental obligations, paid for by energy bill payers, under continuous review".
He adds: "Where we can act to reduce their impact on bills, while maintaining the integrity of our policy, we will."
Energy Secretary Ed Davey is giving an energy statement in the House of Commons.
He began by noting that Britons have seen bills rise every year for the last decade. He said energy companies need to be more transparent about what constitutes energy bills.
Ed Miliband's proposal to freeze energy prices for 20 months if Labour are elected in 2015, will "hurt people", the Energy Secretary told Daybreak.
The energy companies would "push up bills before Miliband's freeze and afterwards", Ed Davey said.
In turn, he claimed, this would "hurt" the fuel poor and "undermine" investment in green energies.