For almost a year the Federal Government's been promising to beat competition into the energy market with a so-called "big stick", with the ultimate goal of bringing down power bills.

The cornerstone of the Coalition's energy policy has been introduced to Parliament (again) after failing to gain traction before the May election.

But the Government hopes it will find more success this time around, arguing new powers to punish uncompetitive energy providers are necessary to reduce prices. Here's how the laws would work.

What is the big stick?

The term refers to proposed Government powers with the purpose of lowering your power bill.

A review by the Australian Competition and Consumer Commission (ACCC) last year found a lack of competition in the energy market, suggesting more could be done to pass savings on to consumers.

Josh Frydenberg would be empowered to force contracts, and seek to break up companies. ( ABC News: Marco Catalano )

But the Government says it is targeting explicitly anti-competitive behaviour with the "big stick" laws.

And while the Government is pointing to that review as reason for the laws, its toughest measures (the biggest sticks, if you will), go beyond what the ACCC recommended.

A crucial component of the laws would allow the Treasurer to request that the Federal Court force companies to sell off assets in cases of extreme misconduct.

Under the proposal, the treasurer of the day would also be empowered to force providers to offer "reasonable" contracts, if the ACCC finds breaches of certain parts of the bill.

But Treasurer Josh Frydenberg said those measures would be reserved for the worst behaviour.

"Both are measures of last resort," he said.

The bill also introduces powers for the ACCC to accept enforceable undertakings, and seek penalties of up to $10 million.

Breaches include failing to pass savings on to consumers, unreasonably refusing to offer contracts, and distorting or manipulating the market to influence prices.

The ACCC would be responsible for monitoring the market and drawing attention to misconduct.

In serious cases, it will be up to the treasurer of the day to decide whether further action, in the form of forced contracting or court-ordered divestiture, would be needed.

Will it actually fix my power bill?

The Government argues the threat of severe penalties for anti-competitive conduct will be an effective incentive in getting power companies to reduce prices.

But the legislation has faced questions over whether it would actually help to lower prices, including from the energy sector and business groups.

Tony Wood, the director of the Grattan Institute's energy program, said the proposed laws don't fit with the issues raised by the consumer watchdog.

"I conclude, reading it fairly closely, that it's unlikely to do anything at all, because it's looking to penalise behaviours that aren't even occurring," he said.

"I would have difficulty finding a direct link to much of what the ACCC said and this legislation."

Mr Wood said there were more effective ways to inject competition into the energy market and lower prices.

Labor remains unconvinced by the policy, but is yet to finalise its position. ( ABC News: Marco Catalano )

"If there is anti-competitive behaviour, and arguably there could be, why not use the existing competition legislation we've got to address it?" he said.

But ACCC chairman Rod Sims, who would be responsible for enforcing the new rules, said the policy would likely have some impact on prices.

"It's mainly focusing on companies having to pass through cost reductions in their retail prices, make sure the spot-market behaviour, the generation market, is appropriate, and make sure they're not denying contracts to smaller players," he said.

"That, all else equal, you'd think would have an effect on lowering electricity prices."

The precedent-setting intervention in the energy market has also raised a question from the Senate crossbench.

They've asked if the Government is going to intervene in the free market in this way, why stop at energy providers?

Centre Alliance senator Rex Patrick has pointed to other sections of the economy — like the country-wide supermarket duopoly — to suggest the big stick's reach should extend beyond the energy market.

Will the stick get stuck in parliament?

The bill was shelved during the last parliament due to a lack of support, but the Government is hoping to convince Labor to support the laws this time around.

The Opposition is yet to formally determine its position, but Opposition Leader Anthony Albanese is signalling the Government has some convincing to do.

"What we've got at the moment is essentially a slogan," he said earlier this week.

"We'll wait and see if there's any substance to the legislation and whether the issues that we raised previously that led us to oppose the legislation have been fixed."

A key concern of Labor was the fear state-owned power companies could be forced to divest assets, which the Opposition labelled "a back door to privatisation".

But the updated bill, introduced into the House of Representatives, rules out privatisation, saying any disposed government assets would have to be sold to other government-owned entities.

After the bill's introduction, a spokeswoman for Shadow Treasurer Jim Chalmers said the Opposition would examine the legislation.

"The Opposition will work through the legislation, discuss with colleagues, and come to a position in due course," she said.

If Labor does not support the bill, the Government will need to rely on the Senate crossbench to pass the laws.