Australian households saved $65 on their power bills over the past year, according to the competition watchdog.

The latest Australian Competition and Consumer Commission report into the National Electricity Market, released on Sunday, found average annual residential electricity bills dropped about 4 per cent in 2018/19 compared with the previous year.

But households were still paying about 20 per cent more than in 2007/08 and the average price for a unit of electricity drawn from the grid was about 45 per cent higher in real terms.

“There is still work to be done to make electricity more affordable for households,” ACCC Chair Rod Sims said in a statement.

He urged households to shop around, look at what some of the smaller energy retailers are offering and consider switching from a standing offer to a median market offer.

According to the report, swapping to a median market offer may save residential customers between $55 and $230, depending on the region. Small businesses could save between $720 and $1155.

Mr Sims said reforms to retailer pricing will benefit almost one million customers on default electricity plans next financial year in NSW, SA, southeast Queensland and Victoria, with those consumers receiving automatic reductions in their bill prices.

“(They) are estimated to save between $152 and $455 in 2019/20, depending on their state and distribution zone,” Mr Sims said, while small businesses could save between $510 and $980.