The Greens are refusing to guarantee support for the government's energy market intervention as confusion over compensation for coal companies threatens power bill relief for struggling households and businesses.
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The Albanese government is also facing the prospect of a major ad campaign, as the oil and gas lobby declares "all options are on the table" to fight the planned changes.
The deal struck between the Commonwealth, states and territories to temporarily cap coal and gas prices and offer power price relief for households and businesses has ignited a political storm in the lead up to Christmas.
Federal Parliament will be recalled on Thursday to deal with the Commonwealth's side of the agreement - legislation to impose a $12 per gigajoule cap on gas prices for 12 months.
Prime Minister Anthony Albanese signaled parliament would also vote on creating a fund to deliver up to $1.5 billion in power bill relief to households and small businesses.
The states and territories are expected to match the contribution dollar-for-dollar.
Treasury modelling has found an average family would be $230 worse off next year without the intervention.
The Coalition has flagged it will vote against the legislation on Thursday, with Opposition leader Peter Dutton describing it as a "witches brew of disaster".
The Coalition's position means Labor will need the support of the Greens to get it through the parliament.
Greens leader Adam Bandt is refusing to rubber stamp the bill ahead of a party room meeting on Tuesday to consider a position.
Mr Bandt's major gripe is the prospect of taxpayers forking out compensation for coal producers subject to a $125 per tonne price cap, which the NSW and Queensland governments will impose under the deal agreed to at Friday's national cabinet meeting.
Mr Albanese told ABC's RN Breakfast that payments would be "reasonable" if production costs exceeded the $125 per tonne mark.
He rejected media reports that as much as $500 million in compensation was on the table.
The Prime Minister repeatedly stated that the legislation to be dealt with on Thursday had nothing to do with coal compensation, stressing the "very simple" bill was just about gas prices and bill relief.
In a statement to The Canberra Times, Mr Bandt said it was "good news" if Labor had excluded "coal compensation" from the legislation.
But Mr Bandt said it appeared the government planned to deliver it through other means, which the Greens would oppose.
He said there was still unanswered questions about the legislation and as of Monday afternoon the Greens were seeking further details from the government.
But Mr Albanese was confident the bill would pass.
"I am very confident that when faced with 'do you want a price cap on gas,' a majority of the House and the Senate will say 'yes'," he said.
"And when asked 'do you want relief for people who are Commonwealth recipients and a $1.5 billion program to reduce people's energy bills,' they'll say yes as well. That's what the legislation does."
Earlier on Monday, Mr Bandt said that rather than compensating fossil fuel companies, the government should impose a tax on their windfall profits.
He said the revenue could be used to help households with the upfront costs of switching from gas to electric appliances, which would cushion them against bill shock once the 12-month gas price cap expired.
"The public shouldn't have to put their hands in their pocket to give compensation to gas or coal corporations, it should be the other way around," Mr Bandt told reporters in Melbourne.
The two Jacqui Lambie Network senators will support the bill, meaning the legislation will pass if the Greens get on board.
ACT senator David Pocock is yet to make up his mind and is expecting to get a government briefing on Tuesday.
He said he will keep pushing Labor on the bigger picture transition.
"This package provides short-term relief but is essentially a band aid on a festering wound that has arisen from long-term failure of energy policy to plan for the transition to renewables," Senator Pocock said in a statement.
The government had been mulling options for an unprecedented intervention since the October budget, which forecast electricity and gas prices would rise 56 and 44 per cent through to the end of 2023 as Russia's invasion of Ukraine continues to wreck havoc with the global energy market.
The plan agreed to at last week's national cabinet meeting triggered an immediate backlash from the resources sector.
Australian Petroleum Production and Exploration Association chief executive Samantha McCulloch on Monday said the plan went well beyond a temporary intervention and allowed for a "indefinite regulation of prices in the Australian gas market".
In addition to the emergency price caps, the government's proposed mandatory code of conduct for the gas sector would include a provision to make sure domestic prices were set at a "reasonable level".
The consumer watchdog would administer the new regime.
Ms McCulloch said the price regulation would have a "chilling effect" on investment, although she declined to nominate individual projects which might not go ahead as a result of the changes.
Consultation on the mandatory code will run through to February, giving opponents time to campaign against it.
Asked to confirm reports the industry was prepared to unleash a $20 million advertising blitz, she did not rule it out.
"All options are on the table," she told reporters in Canberra.
"This is an industry which has invested $400 billion in the Australian economy over the last decade and what we're seeing now is a government changing the rules of the game with alarming frequency.
"So, as an industry, we'll be looking at all options."
Mr Albanese on Monday told ABC radio he would be "stunned" if the Coalition voted in Parliament for higher energy prices, but Mr Dutton said he expected the Labor plan, signed off with the states and territories, would make make the situation worse.
"They've introduced this figure now of $230. They can't explain how they've arrived at that figure. And they're taking gas out of the system, not putting more in. Which is going to drive prices up," he told reporters.
"We're not supporting that sort of witch's brew of disaster."