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The big six energy companies will on Tuesday be ordered to stop "sitting on customers' cash", as the government comes under pressure from Labour to deal with soaring household bills.
In an assault on overcharging by the utility companies, Greg Barker, a Tory energy minister, will demand to know why gas and electricity firms are hoarding up to £2bn from people who pay by direct debit.
He will use a meeting with company bosses to ask about reports they are making £36m a year from interest alone because many customers are paying too much when they are automatically charged an estimated amount for their gas and electricity each month.
A source close to Barker said he will demand the energy companies – British Gas, SSE, Scottish Power, EDF, E.ON and npower – declare how much consumer credit they are sitting on and how many of their customers are in credit.
On Monday night he said it was vital people who paid by direct debt were not "being unknowingly ripped off".
"The better energy companies will now automatically refund your cash if you build up more money than required to meet your normal bill or will pay you interest if you are in surplus," he said. "However, it looks like some companies aren't doing that and I am determined to get consumers a better deal and call time on the big six sitting on customers' cash."
It comes after the Guardian saw figures showing npower stockpiled £400m at one point last year from customers, while British Gas put £20m in "credit balances" into its annual account in one recent financial year.
Following those revelations, the minister will ask companies to pay interest to customers who are in surplus, following the lead of some small suppliers, including Ovo Energy, which pays 3% interest on credit balances.
Meanwhile Owen Paterson, the environment secretary, has written to water companies to "stress the crucial role that the industry can play to bring costs down" for households.
He will ask the companies to consider if they need to apply the full price increases allowed by the regulator next year, which are likely to be around £12 on the average £388 annual bill. The companies are also being urged to bring in "social tariffs" with discounts for households who are struggling to pay.
The coalition has been searching for ways to reduce household bills after Ed Miliband attacked the government for its failure to act on the "cost of living crisis" and offered to freeze gas and electricity prices if he wins power in 2015.
However, Labour is likely to criticise the government for asking utility companies to change their ways on a voluntary basis, rather than forcing them with laws to treat their customers better.
"More than two million households, over one in 10, now spend more than 5% of their income on water according to the regulator and customers in Britain face some of the highest bills in Europe," said Maria Eagle, Labour's shadow environment secretary. "Yet David Cameron still refuses to require water companies to introduce a social tariff to help those who are struggling, even though only three companies have introduced such a scheme under the current voluntary arrangement."
