The Department of Energy and Climate Change said the measures include forcing energy companies to cut the number of tariffs to four for each fuel to end confusion over competing prices.
In addition, companies would have to automatically switch customers to the lowest appropriate tariff unless they object.
Energy Secretary Edward Davey noted that bill payers will no longer face the impossible choice between hundreds of tariffs.
"For too long people have been stuck on the wrong type of energy tariff, paying more than they need to," Davey added.
"Our new proposals will make things much clearer and easier to understand, so that bill payers can get the best deal and feel the benefit in their pockets."
British Gas residential energy managing director Ian Peters noted the company will examine this ‘constructive set of proposals’ in detail.
"It is important we maintain the balance between simplicity and innovation to ensure the market continues to deliver choice for customers," Peters said.
British energy supplier EDF Energy commented that the firm "will now examine the proposals in detail and looks forward to working with ministers during the consultation period."
The proposals set out today are open for consultation until 4 January 2013.
