Council tenants in Leicester who saw heating bills rise by 76% are in line for a rebate, the council has said.
Some people using the centralised heating system said they would struggle to cope after the city council put up prices in October.
Officials said the rise was due to a surge in wholesale energy prices.
The authority has negotiated a revised 44% rise with suppliers. The bills will revert to their old level for now, with the new price coming in from April.
The 3,000 people who used the district heating system, where houses are supplied from a central boiler, saw bills increase by an average of £8 a week when the new rates came in.
Tenants said many of those who used the system were low-paid workers and therefore less able to cope with large rises in their bills.
Leader of Leicester City Council Ross Willmott said: "There will still be an increase but it is much less than those with conventional heating will pay because we can take advantage of the council's purchasing power.
"Because we have taken a long hard look at it, instead of doing these increases every year, if we buy the gas over three years we can smooth out the increases over that period and give people some stability."