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It said these powers will dissuade future investment, forcing the government to rely on federally funded schemes to underwrite new generation to overcome existing power supply issues, putting the cost burden on taxpayers rather than private companies.

The power supply issues came to the fore late last month when Victoria saw a number of power stations break down and a lack of back-up power during a heatwave, forcing rolling blackouts through the state.

The government's "big stick" laws would allow it to regulate prices and break up companies deemed to be misusing their market power and keeping electricity prices high.

It was proposed in the wake of an Australian Competition and Consumer Commission electricity review, which declared Australia's energy market was 'broken' and put forward a number of recommendations to reduce sky-rocketing power prices.

Federal Treasurer Josh Frydenberg said the bill would protect Australian households from high power bills, allowing it to force asset divestments and punish bad behaviour in the energy sector.

"This is a part of our plan to protect customers from high power prices and uncompetitive practices in the energy market," he said.

Opposition remains high to government’s forced divestment big stick, with industry groups warning of the rise of interventionist policies.

There is no evidence of the systemic behaviour the bill seeks to prevent.

Origin Energy chief executive Frank Calabria

Last week,  AGL took aim at the policies, calling them "extreme and arbitrary".

Over two days, the energy and industrial companies will face the government and raise their objections to the proposed laws.

Many of the submissions called on the government to abandon its ‘big stick’ agenda and turn back towards the ACCC’s original recommendations in its 2018 electricity review.

These ACCC recommendations include more monitoring and regulatory powers but rejected supporting forced divestment as an "extreme" measure.

The Energy Consumers Association was the only group ahead of the hearings whose submission backed the proposed legislation, saying it will bring greater customer protection back to the market.

“The bill sets the bar in terms of conduct at a level that energy companies should not find hard to clear,” ECA chief executive Rosemary Sinclair said.

“Given the seriousness of the problems confronting consumers and the market, we believe additional tools to protect consumers, providing they are designed in a careful and calibrated way, is warranted.”

However, the Electrical Trade Unions believed these proposed laws didn’t go far enough in fixing the energy market.

“Fully re-nationalising the electricity industry is the only sensible solution to drive down costs and eradicate energy market misconduct,” ETU divisional secretary Allen Hicks said.

The ETU said by breaking up companies it only created more privatised entities, exacerbating the issue.

The Treasurer’s office was unavailable for further comment ahead of the public hearings, as it carried out the Banking Royal Commissions on Monday.