The Australian Energy Regulator (AER) has been asked to investigate Queensland power prices by Federal Energy Minister Josh Frydenberg, in a move slammed as blatantly political by the State Government.

In the latest exchange in a brawl between the Queensland and Federal governments over energy policy, Mr Frydenberg has written to the AER offering to increase its powers so it can investigate the strategic bidding practices of Queensland's Stanwell Corporation and CS Energy.

CS Energy and Stanwell Corporation have been accused of "gaming the system" giving Queensland the nation's most expensive electricity and costing jobs.

The companies have been accused of using the market to drive up power prices to meet State Government demands for higher dividends.

Mr Frydenberg said in the first five months of this year, electricity consumers in Queensland paid the highest wholesale prices at 30 per cent above the average.

"The former Queensland Labor government merged three generation companies into two, creating the concentration problem in the market," he said.

"The Queensland Government recently announced it was directing Stanwell to stop exploiting its market power.

"In response to this announcement, the electricity futures market saw the biggest single-day price drop for ASX traded baseload futures since 2007.

"The difference before and after the announcement is an indication of the excess profits the Queensland Government-owned generators were earning as a result of exploiting their market power."

'More political petty games'

But the Queensland Government said the AER had already investigated the matter, finding the high prices were caused by higher electricity demand, heat-related network and generation constraints, not bidding behaviour.

Queensland Energy Minister Mark Bailey said Mr Frydenberg's move was "just a diversion from the dysfunction and policy paralysis at a federal level".

"Queensland has got the lowest electricity price increases of any mainland state," Mr Bailey said.

"It's got the lowest wholesale electricity prices today and going forward over the next three years and what we're seeing from the Federal Government is more political petty games.

"For Josh Frydenberg to be using distorting and misleading statistics when the best outcomes in mainland Australia are in Queensland — to be quite frank, is pathetic."

Mr Bailey said the Liberal Party did not like public ownership of power assets.

"This is another attempt by them to privatise them, and I can assure the people of Queensland they will never be privatised under Labor," he said.

"You get better outcomes compared to the southern states where there's privatised power assets, where we're seeing 19 per cent increases in South Australia and the ACT and 11 per cent in New South Wales."