Energy retailers could soon be forced to sell off assets and restructure their companies if it is deemed to be in the public interest.
Leaked draft laws would give Treasurer Josh Frydenberg the power to tell the electricity companies to dispose of their assets, while also restricting potential buyers.
The unprecedented powers would be triggered by the Australian Competition and Consumer Commission ruling an energy company has engaged in "prohibited conduct".
The coalition is hoping to introduce the bill to parliament next week when it resumes for the final sitting fortnight of the year.
Legal advice provided to the Australian Energy Council has questioned the reach of the government's powers.
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The advice warns that clear and objective criteria are needed about how the ministerial powers would be used, to prevent the risk of parliamentary overreach into the territory of courts.
Labor is preparing to announce its own energy policy on Thursday, based in large part on the coalition's abandoned National Energy Guarantee, which sought to link reliability and emissions targets while pushing down prices.
Opposition energy spokesman Mark Butler has stressed building new renewable energy projects puts downward pressure on power prices.
"The idea that there is this false choice and you have to pick, I think reflects the poor, immature nature of the debate here in Australia," he told an industry forum in Adelaide.
Mr Butler also hinted at industry-specific emissions targets.
"It is probably the best opportunity to find ways to reduce power bills and carbon emissions in the built environment, in the industrial sector, and in the household sector."
A survey of business and industry leaders has revealed 92 per cent agree that Australia's current energy and climate change policies are insufficient to meet our Paris targets.
More than four-in-five respondents to the Carbon Market Institute survey believe Australia should take part in a global carbon market and set an economy-wide zero net emissions target for 2050.
Almost two-thirds of respondents from large greenhouse gas emitting companies say they are factoring a carbon price into their investment and/or operational decisions.
Carbon Market Institute chief executive Peter Castellas said there was a clear imbalance between business expectation and current government policies on effective climate action.
"Business wants to see greater ambition and a defined pathway leading to a zero net emissions economy," he said.
"Business is unequivocal that policies need to evolve if we are to meet our (Paris) target. Putting a price on carbon should be an essential part of the policy suite moving forward."
