The report forecast an average saving of $378 a year for households in NSW, $436 annually for Victorians, and $306 for consumers in Queensland if a regulated price in line with market offers and discounts were put in place.

“Competitive retail energy markets are not currently delivering the expected benefits to customers. This is a major concern given energy is a daily essential, not a market that people can opt out,” the report said.

The government’s proposed default power price is one of its ‘big stick’ threats to energy retailers in an effort to drive down power prices, which also includes proposed powers to break up big energy companies.

A draft determination will be released later this month, with the final determination released in April. If it is approved, a regulated price could be in place as soon as 1 July.

The default offer, which was born out of the Australian Competition and Consumer Commission's electricity market review, would put a cap on retail power prices for all energy contracts that do not include a discount. These contracts are known as standing offers.

These standing offers are the back-up contract consumers are put on when their discounts end and are usually significantly higher than the discount offers.

Federal energy minister Angus Taylor said the default offer "will act as a price safety net to put power back in the hands of customers".

"The government has demanded the big energy companies put customers ahead of profits & we make no apology for that. For too long, they have taken advantage of customers who find negotiating with their energy providers time-consuming and confusing," he said.

Grattan Institute energy director Tony Wood said a regulated price will create a safety net for people who have been unable to get the best deals, getting them off high standing offers.

"However, those who have aggressively sought the best deal may lose out as the retailers pull these offers from the market to align with any new price caps," he said.

The move comes as the AEMC announces the start of new rules to give consumers greater protection and control over their power bills.

From Friday, retailers are required to give customers at least five business days warning before the power prices change. This notice is designed to give people more time to review their price and change retailers.

Consumers can also now do self-meter reads, with retailers allowing them to provide an image of their meter to calculate their usage if a meter reader is unable to access their meter. Protections have also been strengthened for people on life support equipment, after the energy regulator handed down hundreds of thousands of dollars in fines to companies that have cut power to these customers without adequate warning.