Energy customers get switch rights under Ofgem plans
Many households were moved on to prepayment meters after running up debts
Households with pre-payment meters who owe up to £500 to their energy supplier will be able to switch to cheaper deals with another firm under new measures.
It is part of a push by regulator Ofgem to encourage suppliers to work more effectively with struggling bill-payers and use disconnection as a last resort.
Customers of the biggest six companies are currently able to move only if they have debts of less than £200.
Meanwhile, the energy secretary is due to unveil plans to counter mis-selling.
Under the Ofgem announcement, British Gas, EDF, Eon, SSE, Scottish Power and Npower will allow people on pre-payment meters to switch from 1 November.
It is thought tens of thousands of users will be helped by the move.
There are 320,000 gas and 315,000 electricity customers with pre-payment meters who owe money to their supplier, according to Ofgem.
The majority racked up the debts when they were given credit by the suppliers and moved to pre-payment meters as a condition of their repayment plans.
Ofgem is due to report figures next week that will show a 59% fall in the number of people disconnected from their gas supply and a 54% drop in electricity disconnections, partly as a result of people being given more time to repay debts.
However, the average amount of debt people are repaying on their gas accounts rose to £371 in 2011, up from £339 the previous year.
Meanwhile, the average electricity debt fell slightly to £357.
Sarah Harrison, senior partner for sustainable development at Ofgem, said: "We welcome the significant falls in the number of households being disconnected, but Ofgem remains determined to ensure suppliers continue to focus on helping consumers manage their energy bills and reduce their debt."
People power
Ofgem will also be given powers to help customers gain compensation if they have lost money owing to energy companies breaking industry rules, under the government proposals to be unveiled by Energy Secretary Mr Davey at the Lib Dem conference.
Ofgem already has the power to penalise energy firms heavily when they break the terms of their licences, for example by mis-selling products or overcharging, but the money from those fines goes straight to the Treasury.
Ed Davey is to outline the government help at the Lib Dem conference
The new powers will allow Ofgem to force suppliers to pay compensation directly to their customers, in cases where a voluntary agreement cannot be reached.
They also include a £5m fund for schemes which bring local people together to switch energy supplier en masse in a bid to secure lower bills.
The cash will go to the best initiatives drawn up by local councils and community groups, with Mr Davey warning that without them the best deals were reserved for "well-heeled internet savvy" consumers.
He was inspired to offer the funding after being present at the launch of such a move in Cornwall - set up jointly by a local authority, the NHS, a trade union, the Eden Project and a brewery.