For the first time since being appointed Energy Minister in August, Angus Taylor has met with his state and territory counterparts in Sydney to discuss reducing power prices and ensuring the reliability of the grid.

Ahead of the Council of Australian Governments Energy Council meeting on Friday morning, Prime Minister Scott Morrison warned he would swing a “big stick” at energy companies if prices didn’t start to fall by early 2019.

“We will be putting maximum pressure on the big energy companies with what I call the big stick legislation”, he told the Nine Network.

“We are expecting the big energy companies to bring those prices down.”

But the companies warn that customers – who they have reaped huge profits from over decades – face unintended consequences from more regulation.

Mr Taylor said he hoped Friday’s COAG Energy Council meeting would be constructive and helpful for families and businesses.

“I look forward to a constructive and cooperative discussion on these key issues to help Australian families and businesses,” he said.

This week he announced plans to lower power bills for Australians, in line with recommendations from the Australian Competition and Consumer Commission’s inquiry into retail power prices.

The proposals include requiring power retailers to set their prices against a default market price, which could help households save hundreds of dollars, and businesses thousands.

However, they did not settle on a final plan to put in a place a default market offer by July 1 next year or a comparison rate against which all offers could be measured, in a bid to push down power prices.

Australian Energy Market Operator chief Audrey Zibelman briefed the ministers on her agency’s preparations to secure supply over summer – the details of which will be made public in a report in mid-November.

Ms Zibelman said there was a “strong plan” in place for summer, but extra measures would need to support reliability.

The ministers agreed to the Energy Security Board doing further work before December’s meeting on draft national electricity law amendments to put in place a “retailer reliability obligation”.

Queensland energy minister Anthony Lynham said it was a disappointing meeting.

“Any Australian that thinks this government has a grasp on energy and climate policy is sadly mistaken,” he said.

Victoria’s Lily D’Ambrosio described it as “Groundhog Day” for energy policy.

“We’ve had three prime ministers, three energy ministers and more failed energy policies that you can count, and we’ve seen more of that today,” she said.

The government has also asked the Australian Energy Regulator to develop a reference bill for each network region, for electricity retailers to calculate and advertise their discounts using a common reference point.

The Morrison government will move to draft federal laws if discussions with the states and territories fail.

-with AAP