Local power company bosses are looking aghast at what the Australian Government is proposing across the Tasman.

It wants the ACCC - the equivalent of New Zealand's Commerce Commission - to have more powers to ensure that energy companies pass on cost savings to consumers and clamp down on market manipulation and other anti-competitive behaviour.

The penalties are eye-watering as well — "up to the greatest of: $10m; three times the value of the total benefit attributable to the conduct or 10 per cent of the annual turnover in the 12 months before the conduct occurred".

But there could be even more, with the courts able to order power companies to divest assets when they breach the rules.

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Naturally, the Australian power companies are furious.

For them, the saving grace is that the law seems unlikely to pass, given the current chaotic state of Australian politics.

The big power companies here have also dismissed it as irrelevant to the local market. Despite this, New Zealand politicians are being lobbied hard to consider very similar moves when they make decisions following the Electricity Price Review.

Some MPs are very receptive to the idea of a much tougher regulator here as well.

The angst comes as the Electricity Authority (EA) investigates complaints that generation-retailers are abusing their market power to push up wholesale spot prices.

In its latest update on the claim by a group of independent electricity retailers, the EA said it understood the investigation may "cause uncertainty" in the market and that it was considering ways to reduce this effect "as soon as practicable".

The claim of "an undesirable trading situation" (UTS) was received by the EA on November 8.

The joint claim by independent retailers Electric Kiwi, Flick Energy, Pulse Energy, Switch Utilities and Vector challenges the EA's explanation for a big spike in wholesale spot prices as being due to a combination of low hydro lake levels and a supply-limiting fault at the Pohokura gas field, the country's biggest.

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The on-going Pohokura problem has caused generators to use more expensive forms of energy to generate electricity, which they say has forced up spot prices since September 15. The group wants the EA to reconsider its view.