Scottish and Southern Energy is the second energy firm to cut prices for customers.
The company, which has nine million domestic customers, is cutting average electricity prices by 9% and gas prices by 4% from March 30.
The move - prompted by lower wholesale energy prices - follows a price cut by British Gas last week.
SSE said the average 'dual fuel' customer taking both gas and electricity from the firm would see their annual bill fall by £66 to £1,193.
But the scale of the cut is small compared to the price hikes pushed through by the firm last year as energy suppliers were forced to pass on rocketing wholesale costs.
Last August SSE lifted electricity prices by 19.2% on average, while gas bills soared 29.2%.
The company said that while prices had recently eased, wholesale electricity and gas costs remained at "relatively high levels" - 46% and 51% respectively above the levels seen in January 2007.
Alistair Phillips-Davies, SSE's energy supply director, said: "We know our customers want to understand what their energy is likely to cost in the future and that's what lies behind the announcement. The UK now relies on energy imports and wholesale prices for electricity and gas are still at historically high levels."
The rest of the UK's "big six" energy suppliers - npower, E.ON, Scottish Power and EDF - are now set to follow suit following the moves by SSE and British Gas.
British Gas is cutting the price of its standard tariff by 10% for 75% of its customers from February 19, saving them an estimated £79 a year on the average household gas bill.
