This equates to around 25,000 cases of electricity theft, a third of which is used to power cannabis farms, the watchdog said.
The proposals include a new industry code of practice governing theft investigations and working more closely with the Home Office and local police forces.
Companies will face a fine if they do not comply.
“Ofgem wants to make sure that consumers are paying no more than they need to for their electricity, and lives are not put at risk,” said chief executive Andrew Wright.
“It’s critical that suppliers do all they can to clamp down on electricity theft. This is why Ofgem is introducing new rules to encourage better theft detection.
“The reforms build on similar obligations we introduced at the start of this year for suppliers to address gas theft more vigorously. All these measures will help to improve the confidence of consumers, who want reassurance that the energy market is fair.”
The deadline for responses for the proposals is 28 August.