British Gas has promised to simplify energy tariffs and provide a more transparent billing system in a bid to regain the trust of its customers.
The supplier will offer two tariffs, variable and fixed, and provide customers with a complete breakdown of all the costs that make up their bills.
Managing director Phil Bentley admitted that British Gas "had not made it easy for customers" in the past and a letter would be sent out to all customers explaining the new policy.
He told the BBC: "It's clear that we need to make things better for our customers. To make sure we do that, I'm committed to having an honest conversation with (them). We are very conscious of our social responsibility."
He added that British Gas had offered cheap deals as loss leaders in order to attract customers but the company would no longer be doing this.
"It's not right if we are charging honest customers more (to fund these deals)," he said.
Earlier this year the consumer watchdog Which? warned that energy tariffs were too complicated for many customers to understand.
Which? asked 36 members of the public to calculate the cost of a domestic energy bill using information from suppliers' websites but the task proved too difficult for all but one of the group. An accountant was among those who failed the test.
Richard Lloyd, executive director of Which?, said: "People tell us they want to be able to check they're paying the right price for their energy, and when even an accountant struggled to calculate a bill, it shows it's far too complicated.
"There are straightforward ways that consumers can cut their bills - for example by switching to online deals or paying by direct debit. But that won't help people to pick the best tariff for them. So Which? wants the regulator to stamp out excessively complex tariffs, across the board."