Houses that are close to new pylons and electricity substations could receive up to £10,000 off their bills over a decade under Jeremy Hunt’s plans.
In his autumn statement on Wednesday, the Chancellor will detail the bid to reduce the delays to projects because of planning objections.
There are also plans to halve the time it takes to deliver new electricity networks to seven years and to prioritise the rollout of electric vehicle charging points.
Officials argued the reforms are part of plans to boost economic growth and to help the UK hit net zero after Prime Minister Rishi Sunak faced criticism for watering down climate plans.
A new “premium” planning service across England would aim to speed up pre-application services for major applications in exchange for a fee and refunds when not met.
Matt Copeland, head of policy at the National Energy Action campaign to eradicate fuel poverty, said: “It’s only right that those affected by pylons are compensated.
“But this is not a substitute for the UK Government supporting vulnerable people with their sky-high energy bills.
“Millions of households will be cold at home this winter if no further support is announced in the autumn statement this week.”
The Treasury has declined to say who would pay for the discount on bills.
Labour’s shadow chief secretary to the Treasury, Darren Jones, said: “After 13 years of Tory economic failure, this Conservative Government is out of ideas and now looking to Labour for the solutions.”
Liberal Democrat Treasury spokeswoman Sarah Olney said: “This scheme would create a postcode lottery system leaving millions of families still facing higher energy bills while others benefit.”
Expanding the power grid would “unlock global investment for Britain and bring improvements for people across the country, with energy security that will keep energy costs down”, argued a Treasury source with knowledge of the plans.
“And by speeding up the planning system – including the rollout of EV charge points – we will be tackling one of the most common issues raised by businesses who are keen to invest in the UK,” they added.
Mr Hunt revealed he has spoken to Elon Musk about getting a Tesla factory in the UK with plans to boost the electric vehicle industry with charge points being announced after this news.
Meanwhile, on Sunday, shadow chancellor Rachel Reeves will unveil Labour’s “better off plan” to cut household bills by up to £3,000 a year.
Over a decade, Labour pledged to drive down bills by insulating homes, generating cheaper energy, cracking down on unfair insurance practices and driving up housebuilding.
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Ms Reeves said: “The economy is not working for working people. After 13 years of economic failure, families are worse off, with higher taxes, higher mortgage payments and prices still rising in the shops.
“Under Keir Starmer’s leadership, the Labour Party has changed and is now the party of economic responsibility.
“A Labour government’s priority would be growing our economy so we can boost wages, bring down bills and make working people in all parts of the country better off.”
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