ACT residents will be among the first to feel the impact of the carbon tax with a proposed 17.22 per cent increase in regulated electricity prices.
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In its draft pricing decision issued on Thursday, the ACT Independent Competition and Regulatory Commission said that of an expected average household weekly increase of $4.70, about $3.65 was attributable to the carbon tax. The proposed price increase will begin on July 1. Submissions on the proposed increase are sought by the commission by May 8.
Senior commissioner Malcolm Gray said that under the commission's draft price direction, regulated electricity prices would increase by 17.22 per cent.
''The rise in regulated retail tariffs is largely attributable to increases in the cost of wholesale electricity with a smaller contribution coming from network fees,'' Mr Gray said. ''It would appear that the increase in the cost of wholesale electricity is almost entirely attributable to the introduction of a price on carbon by the Australian government.''
The terms of reference required the commission to set a price for two years. Instead, its draft price direction is for only 12 months.
Mr Gray foreshadowed the commission would review the operation of the wholesale electricity market during 2012-13, once the price on carbon had taken effect, before preparing a price direction for 2013-14.
Opinions vary on whether the government's compensation for the carbon price will cover the proposed price increase and other costs attributable to the carbon tax.
ACT Environment Minister Simon Corbell said that despite the proposed increase, the cost of electricity in the ACT would remain on average almost 30 per cent less than in NSW.
He said about 80 per cent of Canberra households would receive carbon tax compensation from the Commonwealth that would help cushion the price increase. On average, Canberra households would receive about $600 from the federal government. The ACT government had provided low-income households with more than $226 a year to help with electricity costs.
ActewAGL's general manager retail Ayesha Razzaq said that despite the price increase, the ACT would continue to have the lowest electricity prices in Australia. She said there would be no increase in the retail margin in the proposed price increase. ActewAGL had some concerns over the draft decision which it would raise with the commission.
