Energy providers will have to improve their services by "£12 a year less" than they normally would and then pass those savings on to consumers, OfGem have announced.
Speaking on Good Morning Britain OfGem's Maxine Frerk, said the changes should come into force "from next April" and savings "should flow into customer's bills from that point".
Compensation for energy customers, who have been left without power for more than a day during severe weather, has been tripled.
Energy regulator Ofgem is to take action against two power companies, who have already paid out £4.7 million to powerless homes, for even more compensation.
ITV News correspondent Nina Nannar reports:
Ofgem has said "companies could have done more" to help customers during last year's winter storms, when power cuts affected nearly a million homes.
Ofgem's Maxine Frerk said:
A power cut at Christmas time is the last thing anyone needs.
While we recognise the hard work of the companies and their staff who were out working to reconnect customers during the severe weather, the companies could have done more to plan for the weather and keep customers informed.
The energy regulator is to more than double the minimum compensation payment for households that suffer power losses due to severe weather.
Ofgem said the planned changes should "strengthen the incentives for companies to act quickly" and reconnect customers as soon as possible.
Energy regulator Ofgem has agreed an additional £3.3 million from companies SSE and UK Power Networks after an investigation into how they dealt with last year's winter storms.
The money will go to organisations that played a key role in helping vulnerable customers who suffered power loss.
The firms have already paid out £4.7 million and committed to improvements.
Severe weather over Christmas 2013 saw power cuts affect nearly a million homes and Ofgem has today put the industry on notice that any repeat of last year's performance issues will trigger further action.
Scottish and Southern Energy's payout totals £2.3 million to the British Red Cross, Age UK, National Energy Action, Macmillan Cancer Support, and to a new community fund.
Distributor UK Power Network totals paid £1 million to the British Red Cross, the Royal Association for Deaf People, Carer's Trust and Citizens Advice.
Energy provider Scottish and Southern Energy and distributor UK Power Network have agreed to pay out a total £8 million over their handling of last year's winter storms.
An additional £3.3 million has been secured by regulator Ofgem after the £4.7 million already paid out to customers over "exceptional" storms last Christmas in the south of England.
Energy regulator Ofgem is to more than double the minimum compensation payment for households that suffer power losses due to severe weather.
Affected customers will now receive at least £70 if they experience an outage of more than 24 hours.
Over three quarters of tenants have never switched electricity provider, according to the latest data from Ofgem's 2014 Consumer Engagement Survey.
The poll revealed one in five tenants did not know they could change energy providers in what the industry regulator dubbed the "sheer lack of awareness" of renters' rights to shop around.
A further 74% admitted to never switching to another gas provider.
Ofgem said that although renters often thought they had to accept the energy suppliers already in place when they moved in, this was very rarely the case.
Chief scientist at Greenpeace UK - Dr Doug Parr - has said the energy industry needs "real change," rather than an investigation by the Competition and Markets Authority.
What UK consumers need from this investigation is more than yet another ineffectual slap on the wrist for the big six's cartel.
We need real change to the market so that companies offering a better deal for customers and the environment are no longer shut out of the market, but more importantly we need to clear the way for alternative business models to the big utilities.
Following Ofgem's announcement that the Competition and Markets Authority will hold a full investigation into the Big Six, ITV News' Business Editor Joel Hills asks why more of us aren't switching from the big six energy suppliers?
Ofgem's investigation into the Big Six energy firms should help "rebuild consumer trust and confidence" in the energy market, the watchdog said.
Ofgem says soaring household bills and intensifying public distrust highlighted the need for an investigation, which will determine whether the companies were making excess profits, after they quadrupled to more than £1 billion in three years.
The Competition and Markets Authority (CMA) probe comes after latest figures show that household electricity by prices in the first three months of 2014 were almost 6% higher than last year.
The investigation, expected to take around 18 months, will look at the relationship between the supply businesses and generation arms of the Big Six energy firms.