Chris Huhne has dismissed reports that the UK is facing some of the highest energy costs in Europe as "nonsense".
The Sunday Telegraph says providers are to get a higher-than-normal fixed price for electricity generated from nuclear power and wind farms, under government plans, costing consumers more.
This follows the news that British Gas is putting up domestic gas and electricity prices by 18% and 16%.
But Energy Secretary Mr Huhne said UK energy was among Europe's cheapest.
He also urged consumers to use price-comparison websites to save money.