Chancellor Rishi Sunak is understood to be considering the plan.
It follows the cost-of-living crisis that is expected to double energy bills for households in April.
What are the government’s plans?
Rishi Sunak was presented with the plan as part of many discussions with backbench MPs on how to help millions of people from impending price increases, according to The Telegraph.
A proposal presented was to slash the current VAT rate on energy - which Boris Johnson promised to cut following the UK’s departure from the EU.
However, MPs are said to be backing more of a radical scheme to give more money to those living in the coldest areas.
The majority of the cash injections would be given to homes in the North of England if implemented, The Telegraph suggested.
What does the Government already have in place to help people?
The Government currently offers the Cold Weather Payment scheme which pays some people on benefits £25 for each seven-day period when temperatures hit below freezing.
However, Treasury sources are concerned there is no clear route to dividing up the winter payment scheme geographically making it a difficult policy to implement, according to The Telegraph.
What other policies are being discussed?
An increase of the Winter Fuel Payment, which helps pensions cover their energy bills, is another option that is being looked at.
This Payment is currently worth up to £300.
A cut to the green levy that customers pay to fund investments for renewable energy projects is also on the cards.
What have energy companies said?
MPs condemned the advice on Monday saying it was “plainly offensive”.
An email sent to SSE Energy Services customers caused outrage. The email included ten "simple and cost-effective ways to keep warm this winter”, the Financial Times reported - and most were absurd.
Some of the recommendations included "a cuddle with your pets and loved ones", chomping down some ginger and porridge, and avoiding chilli "as it makes you sweat".
Another suggestion was to “get moving” by cleaning your house and challenging "the kids to a Hula-Hoop contest".
SSE Energy Services, which is owned by OVO Energy, has since apologised and released this statement: "We understand how difficult the situation will be for many of our customers this year.
"We are working hard to find meaningful solutions as we approach this energy crisis, and we recognise that the content of this blog was poorly judged and unhelpful. We are embarrassed and sincerely apologise."
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