The competition watchdog has recommended a complete "reset" of the national electricity market after accusing power companies of gouging customers with unnecessary costs.
The Australian Competition and Consumer Commission has told the federal government in a report due to be released on Wednesday the sector needs reform to bring down prices and restore confidence.
The ACCC's wide-ranging investigation into retail energy pricing also suggested the government's planned national energy guarantee could be hampered by what it described as a broken market.
Energy Minister Josh Frydenberg said the Turnbull government would carefully consider the report's 56 recommendations in consultation with state and territory governments
"There is good news for consumers out of these recommendations which the ACCC has said will reset the market and drive power lower," Mr Frydenberg told Sky News on Wednesday.
It has recommended governments effectively underwrite the construction of new dispatchable power sources - either baseload coal or gas - by guaranteeing long-term contracts for large industrial and commercial users.
Resources minister Matt Canavan seized on that recommendation, arguing it bolstered a push among some National MPs for more coal investment.
"The ACCC has recommended the government underwrite baseload power investments. Once again common sense of the Nationals is vindicated," he tweeted on Wednesday.
Mr Frydenberg said the government would carefully consider that recommendation
He also welcomed the ACCC's support for the government's national energy guarantee
"The ACCC as the competition watchdog has got no partisan point to make. What it's looking to do is produce the best possible outcomes for the consumer," he said.
Foreign Affairs Minister Julie Bishop said a number of government initiatives were already reigning energy prices in.
"We are certainly committed to affordable and reliable energy," Ms Bishop told the Nine Network.
The ACCC inquiry was commissioned in March 2017 by Treasurer Scott Morrison.
ACCC chairman Rod Sims is due to release the final report ahead of a speech by Prime Minister Malcolm Turnbull in Brisbane on Wednesday.