Updated August 20, 2018 07:53:56

Prime Minister Malcolm Turnbull has outlined further changes to his national energy policy amid increasing pressure from within his own party.

The Government has already capitulated on plans to embed the Paris emissions reduction targets in Commonwealth legislation.

In a video posted to Facebook, Mr Turnbull also revealed a plan to impose default energy prices on power companies, as well as tough penalties for providers that failed to bring costs down.

Both were recommended by the Australian Competition and Consumer Commission (ACCC).

"We'll set a price expectation which should be the most anyone pays. And so, through more competition and all our other changes, that price will come down," the Prime Minister said in his Facebook post.

"If companies don't pass them on, the ACCC will put them on notice. And if the prices remain too high, we'll implement the toughest penalties until you're getting value for money.

"We will not hesitate to use a big stick, as we did with gas, to make sure the big companies do the right thing by you, their customers."

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Internal division over the National Energy Guarantee has fuelled talk of a possible leadership challenge, with Home Affairs Minister Peter Dutton seeking to play down speculation on Saturday.

"In relation to media stories today, just to make it very clear, the Prime Minister has my support and I support the policies of the Government," he said on Twitter.

Mr Turnbull refused to be drawn on the leadership issue as he announced new drought support measures in the New South Wales town of Forbes.

"I'm focussed on getting energy prices down and I'll leave you to all of the speculation," he said.

However, in another sign of the difficulties Mr Turnbull faces, he had barely begun his press conference when his predecessor Tony Abbott took to Twitter to reinforce his call to pull out of the Paris climate agreement.

Mr Turnbull will brief Cabinet ministers on the policy changes at a dinner at the Lodge in Canberra tonight.

Deputy Nationals leader Bridget McKenzie told Sky News she had not been consulted on the plan.

"I haven't seen the details of those changes … following that announcement by the PM, we'll be considering those at our party room on Monday," she said.

Senator McKenzie backed Mr Turnbull's position as Prime Minister.

"I think Malcolm Turnbull is our Prime Minister and I would like to see him stay as our Prime Minister and that is actually a decision for the Liberal Party," she said.

"And I haven't heard anything personally that would suggest that that's not going to continue to be the case."

Labor outlines similar plan

The Federal Opposition has outlined a separate but very similar energy policy, promising to cut power prices by up to $165 for households and $1,500 for small businesses.

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Labor said it too would introduce a default energy price for consumers.

"At the moment, the big privatised power companies are able to bamboozle households and small business by offering so-called discounts off a wide range of variable benchmarks," Opposition energy spokesman Mark Butler said.

"In this case, households will know what they're signing up to.

"Malcolm Turnbull is too out of touch and the Liberals are too divided to tackle the power price crisis."

Greens leader Richard Di Natale criticised the Government's decision to set emissions reductions by regulation, rather than legislation, and said he did not trust Labor to introduce more ambitious targets if it wins the next election.

"I don't trust Bill Shorten to do it and let's remember, if Labor don't win, we're giving the tools to the climate deniers within the Coalition to slash these already-pathetic targets even further and effectively rip up the Paris climate agreement," he told Insiders.

Topics: government-and-politics, federal-government, electricity-energy-and-utilities, industry, consumer-protection, alp, australia

First posted August 19, 2018 11:55:59