Nowhere has this failure been worse than in Victoria, "the state with the most retailers and the longest experience of deregulation", the report says. "The rise in energy prices demonstrates how crucial it is for Dr Finkel's recommendations to be translated into action," Job Briskin, Origin's head of retail, said. Its authors, Tony Wood and David Blowers, estimate that Victorians would save $250 million a year if the profit margin of electricity retailers was the same as for other retail businesses. Household electricity bills have doubled in the past decade, partly because of heavy investment in the electricity grid in state's such as NSW. "But the steep price rise in Victoria is unjustified because, unlike NSW and Queensland, it has not had to cover major new investment in poles and wires," the report says.

Not only are households paying more than they need to, but the way energy retailers advertise their discounts is at best confusing and at worst misleading, and even if a household takes advantage of a discount, it may end up paying much higher prices when the discount period expires, Mr Wood said. In the UK, criticism of the confusing array of market offers prompted the industry regulator there to force power companies to simplify their offers, which resulted in the lowest price offers disappearing, Mr Wood said. The chairman of the Essential Services Commission in Victoria, Dr Ron Ben-David has warned for years now of the fact that electricity prices in Victoria had moved higher in tandem with other states, with the profit margin expanding to as much as four times that of NSW or Queensland retailers. "Either competition is not effective or retailers are extracting economic rent," Mr Ben-David said in a speech as long ago as 2013. "Victoria may have the most competitive market ... but is it efficient?"

Among other things, the committee – which will also include Special Minister of State Gavin Jennings, Treasurer Tim Pallas, Energy Minister Lily D'Ambrosio and Industry Minister Wade Noonan – wants to maintain Victoria's base load energy capacity as it moves away from brown coal as its chief energy source. Mr Andrews said a mature debate about energy security was needed. "Our focus is on keeping Victoria's diverse energy system as affordable, resilient and secure as possible, particularly during peak periods and extreme weather events," he said. It is believed that Victoria could be set to follow South Australia's lead on large-scale solar power generation, with an investigation of battery storage to shore up the state's base-load power capacity, providing a buffer against periods of extreme demand. "We may yet see fairer prices," the Grattan Institute report says.

"We may yet see innovation. But if not, government will have no choice but to return to price regulation." Elon Musk put last minute pressure on the President. Credit:AP Prime Minister Malcolm Turnbull met with Tesla chief executive Elon Musk, above, on Sunday to talk about battery storage as a solution to what some see as a looming energy security crisis. Mr Musk has boasted he can provide South Australia with sufficient battery storage to solve the state's energy problems within 100 days, or it will be free. South Australia has been dogged by a number of blackouts in recent months, sparking debate about whether a push towards renewable energy, particularly wind, has been to blame.

Victoria remains heavily reliant on Latrobe Valley brown coal for its energy, but the Andrews government has set a target to generate 25 per cent of the state's electricity using renewable energy by 2020, and 40 per cent by 2025.