'The solution is electrification': Labor secures Greens support for power bill relief

A suburb-wide household electrification pilot for the ACT, championed by independent senator David Pocock, is set to be considered as part of the plan to be developed between Labor and the Greens in the lead up to the May budget.

Federal Parliament is being recalled on Thursday to deal with legislation to address skyrocketing power prices.

The bill will pass with the support of the Greens, Senator Pocock and fellow crossbenchers Jacqui Lambie and Tammy Tyrrell.

Energy Minister Chris Bowen said coal and gas price rises will now have the "sting taken out of the tail".

"This is the government of Australia acting in the national interest, working as a good government does, across the aisle, with people of good faith and goodwill, for a good outcome," Mr Bowen said.

"That is what this government sets out to do and it's what we believe in."

The legislation will cap gas prices at $12 a gigajoule for 12 months and create a fund to deliver up to $1.5 billion in power bill relief to households and small businesses.

Separate state regulation would apply a temporary cap on coal of $125 a tonne.

The Commonwealth, states and territories agreed to the intervention at last week's national cabinet meeting.

Treasury modelling has found an average family would be $230 worse off next year without the drastic steps, which are fiercely opposed by the oil and gas sector.

But while the "sting" may be taken out, Mr Bowen has conceded household and business power bills would still rise due to international pressures.

"We expected a 36 per cent increase next year - the coal and gas cap reduces that substantially at 23 per cent. Adding the rebates, you get down again," he said.

"We have never claimed this is a magic bullet, and we will see prices go down an extent.

"Nobody can point to anywhere where we will say we are reducing energy prices magically in the next six months."

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Despite strong reservations about the legislation, the Greens will support it after Labor agreed to develop a package to help households and businesses switch to electrical appliances.

Mr Bowen said the package would be "meaningful and substantial", but would not be drawn on how much it might cost.

"That could save households hundreds, if not thousands of dollars, and these will be savings that last a lifetime," Greens leader Adam Bandt said.

"The estimated savings for switching from dirty and expensive gas appliances over to electric could be up to $1,900 a year alone and full electrification of your home could be $3,500.

"But [for] too long, too many people have been barred from making that switch and enjoying those savings because there is an upfront cost associated with that."

Earlier, Opposition Leader Peter Dutton would not confirm the Coalition's position as it hadn't seen the final legislation.

Mr Dutton said the opposition supported bill relief for households, but not the gas price cap.

Given the government won't split the legislation, the Coalition will either have to support the entire package or vote against cost-of-living relief for households.

Mr Dutton said the government was using the legislation as a "political wedge".

"Australians aren't stupid Prime Minister, they see through these sorts of political stunts," he said.

Mr Bowen the opposition was "not constructive and not of good faith".

"They have succeeded in making themselves irrelevant," he said.

The announcement of Labor-Greens deal came after Senator Pocock called on the government to move towards fully electrifying every home in Australia.

Having described the coal and gas market intervention as "a Band-Aid on a festering wound", Senator Pocock urged the government to broaden the package to include a national transition authority to help fossil-fuel dependent communities transition to renewable energy, as well as support a suburb-wide full household electrification pilot in the ACT.

Parliamentary Budget Office costings put a $11.3 million price tag over four years for such a trial for 1000 Canberra homes.

"Fully electrifying every home in Australia - including by equipping them with things like solar panels and heat pumps - would cost about the same as the government currently spends every year on fossil fuel subsidies," he said.

Mr Bowen said an ACT pilot would be considered.

"I recognise that in good faith and I've had [the] most detailed conversations with the Greens. David has raised it with me," Mr Bowen said. "Pilots and that sort of thing are something we'll consider as we develop a strategy."

Senator Pocock and the Greens continue to call for a windfall profits tax on gas companies to fund compensation and energy bill relief.