Treasury analysis shows wholesale power prices have dropped up to 44 per cent

Amid criticism over the effectiveness of its Energy Price Relief Plan rushed through Parliament late last year, the government has released figures indicating that wholesale electricity prices dropped by between 29 and 44 per cent after the policy was adopted.

The government expects that as a result of its policy, household electricity bills next financial year will be $230 less than they would otherwise have been.

Treasurer Jim Chalmers said the scale of power prices rises forecast before the government intervened in the market had been "untenable".

"This isn't an overnight fix. It's going to take some time, but it's heartening to see the plan is already starting to work," Dr Chalmers said.

"Our intervention will help take some of the sting out of power prices for families and businesses."

The government's Energy Price Relief Plan caps, for 12 months, the price of black coal at $125 a tonne and the cost of gas at $12 a gigajoule. It also includes $1.5 billion of energy bill assistance for eligible households and businesses, to be matched by state and territory governments. And it puts in place a mandatory code of conduct to force energy suppliers to set prices at a "reasonable" level.

But the delayed impact of the plan on power bills is creating a headache for the government as energy prices surge.

Origin Energy is pushing up gas prices for residential customers by an average 7 per cent from February 1 and small businesses face a 9.1 per cent hike. ACTEWAGL is expected to announce its revised prices mid-year.

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Further muddying the waters for the government as it tries to justify and explain its policy is the commitment it gave before the last election that annual household power bills would fall $275 by 2025 as a result of its climate and energy policies.

The economic modelling underpinning the promise was done before the global energy crisis sparked by Russia's invasion of Ukraine, rendering it quickly out of date. But the federal opposition has taken to taunting Labor about the commitment and stoking fears about its intervention to hold price increases down.

The government is also combatting concerns raised by gas producers claiming a lack of clarity about the rules under the new mandatory code of conduct.

Energy giant Woodside said it had delayed signing supply contracts for 2024 because of uncertainty about the requirements it would face.

This is despite assurances from the Australian Competition and Consumer Commission that gas companies have enough information to start complying with the price cap.

ACCC chair Gina Cass-Gottlieb told ABC radio the gas industry had been provided with "sound and workable" guidance which provided flexibility for supply agreements that spanned several years.

But Australian Petroleum Production & Exploration Association (APPEA) chief executive Samantha McCulloch said the interim guidelines did little to resolve the short and long-term uncertainties in the market and underscored the rushed nature of the policy.

"The interim guidelines reinforce the disconnect between the policy and the operations of the Australian gas market in practice," she said in a statement.

Opposition Leader Peter Dutton said this week that the gas price cap was not working as intended: "We warned it would be a disaster. They did it and what are we seeing now? An increase in prices".

While it is expected to take time for wholesale electricity price drops to feed through to some parts of the market, retailers have already begun purchasing the cheaper electricity, which the government expects should help reduce the extent of anticipated price rises.

In a warning to energy companies, Dr Chalmers said the consumer watchdog will be closely monitoring their actions.

"It's important that we start seeing these forecast price improvements flow through to consumer," he said. "I've spoken to the ACCC and they will be watching this closely. The rules are clear and so are the consequences for breaching those rules."