Shadow energy secretary Caroline Flint will announce on Thursday that, if Labour were to win the general election in May, a new energy regulator would be given the power to revoke licences of suppliers which act against the interest of customers.
Labour has stated the plan would also see the watchdog publish an annual report rating energy providers' performances.
According to the latest figures, since 2011 current regulator Ofgem has imposed 30 fines totalling more than £87m on energy suppliers, while a further 16 probes into potential bad practice are being investigated.
The shadow energy secretary has already stated her intention to impose a price freeze on energy prices until 2017 if her party returns to Downing Street next spring and she's expected to highlight the proposed new measures on Thursday.
"The public have a right to be treated fairly by energy companies. Where firms fail to meet these standards there must be tough and decisive action. Too often energy companies seem to view the regulator's fines as a cost of doing business - not as a warning to get their act together," Flint will say when she visits the key seats of Reading East and Reading West.
"Of course consumers must be compensated - but if energy companies persist in mistreating their customers they must know their licence could be on the line."
The debate on energy prices is a pivotal point in Labour's strategy and Flint is also expected to release figures which, according to her party, show that the energy costs have risen four times as fast as wages since 2010 and twice as fast as inflation.
The Tories have previously dismissed accusations that they oversaw a hike in energy costs, saying that bills went up by 80% under the previous Labour legislation.
"We'll take no lectures from the party that brought Britain's economy to its knees. Labour left our country with a broken energy market and huge taxes on bills - meaning the number of people in fuel poverty nearly doubled in Labour's last five years," a Tory spokesman was quoted as saying by the Guardian.
Claire Francis, editor in chief at MoneySuperMarket, said that energy bills were likely to remain in the political spotlight in the run up to next election and that her organisation welcomed Labour's proposals to introduce a new regulator.
"The energy market is broken: competition isn't working as it should and consumers are failing to take advantage of the fact that they can probably save money by switching to a cheaper tariff," she said.
"The average household could typically save £180 a year, but apathy reigns and we need to be doing more to tackle this.
"In the meantime, bill payers shouldn't be blindsided by talk of no price rises this year or a price freeze if Labour wins the election. "