Power companies under pressure over prices

Power companies are under pressure to cut prices or face a possible royal commission, with yet another report into the energy industry due out in days.

Coalition backbench MPs and the Greens are pressuring the government for a major inquiry into the energy industry, which has seen prices skyrocket for households and businesses.

Labor is yet to formally consider whether it wants to hold a royal commission.

"It's up to the companies and the government to show a royal commission isn't necessary," Labor frontbencher Jim Chalmers told Sky News on Monday.

The Australian Energy Regulator's latest draft guidelines for the rate of return companies can expect from their energy investments call for a $40 a year cut for consumers.

"If implemented, this draft guideline could result in household customers' bills decreasing by about $30 to $40 per year," AER chair Paula Conboy said on Tuesday.

Prime Minister Malcolm Turnbull has rejected calls for an energy royal commission, promising an "illuminating" Australian Competition and Consumer Commission report will be released this week.

Mr Turnbull is relying on the coalition's national energy guarantee policy to lower prices, while guaranteeing reliability and cutting emissions.

But it is causing tension within the Liberal and National party rooms, with some backbenchers arguing against the policy.