Power bills to be based on own meter reads

Power companies could face fines if they don't comply with a proposed new rule to allow people to read their own electricity meter rather than relying on estimates.

The Australian Energy Market Commission has drafted a rule that they say will reduce the risk of customers being billed more for over-estimated usage.

Five per cent of household bills are based on estimates where companies have been unable to get an actual reading, but such cases are one of the most frequent categories of customer complaints, state ombudsmen and consumer groups said.

Energy Minister Josh Frydenberg welcomed the move, which came at his request.

"While some retailers already offer their customers the ability to submit a self-reading of their meter, these changes will ensure everyone has the ability to rectify an inaccurately estimated bill," he said.

AEMC has recommended retailers who fail to comply with obligations face new civil penalties.

The rule is part of the consumer protection action plan due to be finalised in November.