Energy companies will be required to let customers know what their best deal is, in a move which ministers say could save households up to £100 a year.
Firms will be obliged to tell people about the most suitable tariff for them and to offer it if they request it.
Announcing the move, Deputy PM Nick Clegg said seven out of 10 people have the wrong deal and pay too much.
Labour have accused energy firms of "ripping off" people and said there must be more competition in the market.
Under the deal, British Gas, E.On, NPower, Scottish and Southern Energy, EDF and Scottish Power will contact their customers once a year to tell them what the best tariff is for them, and how to get it.
They will also contact customers coming to the end of a fixed-term contract with the same advice.
They will not be obliged to let people know about cheaper deals with rival companies.
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