Energy Minister Josh Frydenberg expects power companies to cut bills for households and businesses as early as July.
Mr Frydenberg said there were some positive signs in the energy market, including a 28 per cent drop in wholesale prices between January and May.
The wholesale price makes up about a third of power bills.
The next round of retail price determinations for Queensland, SA and NSW will be in July, and Victoria in January.
"We've made it very clear to them we are expecting them to pass through to the consumer the benefit of those lower wholesale prices," Mr Frydenberg told Sky News on Tuesday.
He could not guarantee the size of the price fall, but said the electricity companies were on notice the Australian Competition and Consumer Commission was looking at the "worrying" restriction of competition in the sector.
"We are focused on what they (retailers) do in July, bearing in mind by the end of June we will have an ACCC report which will ... shine a very bright light where the light has never gone before on what these energy companies are doing in the sector," Mr Frydenberg said.
Liberal MP Craig Kelly said the fact that AGL had not sold its Liddell coal-fired power plant to Alinta showed the electricity market was wracked by anti-competitive conduct.
Mr Frydenberg said the rejection of the sale was disappointing, but the government had always said it needed to be a commercial negotiation.
"There's no doubt that consumers would have been better off if AGL had sold Liddell to another party," he said.
However he ruled out the government buying Liddell, as has been sought by some coalition MPs including former prime minister Tony Abbott.