British Gas is the latest big UK energy supplier to drop its prices, as it cuts domestic electricity bills by five percent for its 5.3 million customers.
The move follows pressure for the UK's big six energy giants to take action after a five percent drop in its competitor EDF Energy's gas prices on 11 January against a backdrop of falling wholesale energy prices.
"We want to keep prices as low as possible for our customers," said Ian Peters, managing director at British Gas.
"Household budgets are stretched and we are doing everything we can to help our customers keep their bills down."
This price cut does not offset the 16 percent rise in its electricity prices announced in July but will knock an average of £24 a year off customers' bills.
Pressure is mounting on the other large energy firms to do the same.
Energy secretary Chris Huhne has called for all the big six suppliers to cut prices.
"Households have faced real difficulties this winter after last year's global gas prices pushed up bills," said Huhne.
"Some big energy suppliers were quick to pass on rising costs last year and it is only right that they should now pass on cost reductions to hard-pressed householders as quickly as possible."