Australia’s energy watchdog will investigate suspicions that electricity networks and gas pipelines have overcharged consumers by $400 million a year to cover their corporate tax bills.

Network charges have been the single biggest factor in rising household electricity bills over the past decade. The charges cover the cost of the "poles and wires" used to transmit and distribute electricity.

Electricity networks and gas pipeline businesses are allowed to cover their corporate tax liabilities by passing on the cost to consumers – usually totalling about $600 million a year.

However, it is understood the actual tax bill incurred by the networks may be about $200 million a year. This means consumers may have been charged three times more than needed to cover the tax liabilities, a possibility Energy Minister Josh Frydenberg said was ‘‘totally unacceptable’’.