Electricity bills for the average Canberra household are set to rise by about $3.70 per week from July 1, under a draft determination by the ACT Independent Competition and Regulatory Commission (ICRC).
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Power prices are likely to increase by 10.9 per cent, although possibly more, following recommendations by the independent regulator.
Senior Commissioner Joe Dimasi said for the average household using about 8,000 kWh per year, it would mean an electricity bill increase of about $191.
However sustainability minister Shane Rattenbury said Canberrans would still pay on average $800 less than Queanbeyan residents despite the proposed increase.
"Despite the proposed increase, the ACT will continue to have some of the lowest electricity prices in the country," Mr Rattenbury said.
Comparison carried out by the ICRC showed Canberra electricity bills were on average about $600 cheaper than Sydney, about $800 less than Brisbane, $1300 cheaper than Adelaide, about $250 less than Melbourne and around $700 cheaper than Hobart. No data was available for Perth.
But the ICRC said if the wholesale price of electricity remained high, it was is likely to result in a higher percentage price increase.
The commission noted the biggest driver of the estimated price increase was the wholesale electricity purchase cost, which has more than doubled from around $51 per MWh to $110 per MWh since last June.
"We don't regulate the wholesale market, that's outside of our control but it seems to be the uncertainty we're seeing in the market largely as we're seeing plants close, as we're seeing the price of fuel supply like gas go up , as the market restructures, we're seeing all of these uncertainties which has really driven the price up over the last 12 months," Mr Dimasi said.
"The ACT is still going to be the cheapest, to be fair part of that is because our network costs are a bit lower than the others and we do have regulated retail prices and we do try and keep the retail components of those prices as regulated as possible.
"Having said that 88 per cent of the costs are outside of those components that are under the control of ActewAGL retail so we can't control for everything and we can't control for these big jumps in the wholesale market."
Mr Rattenbury also pinned the blame on "ongoing uncertainty around the Federal Government's energy policy".
"Investment in new energy projects has stalled, as industry awaits a clear plan for the future of energy in Australia, particularly on setting a price on carbon emissions," Mr Rattenbury said.
"The bulk of today's proposed increase is outside the control of the ACT and similar price rises will be felt by most other Australian states."
The draft ruling from the ICRC coincided with Deputy Prime Minister Barnaby Joyce lambasting the ACT's 100 per cent renewable target as "crazy" on the ABC's AM program.
"We've got the ACT saying they want 100 per cent renewables and it's crazy," Mr Joyce told host Sabra Lane on Tuesday morning."So, what we have to have is the Labor party, they have to stop listening so much to the Greens and start listening a bit more to common sense and, you know, pushing for agendas that we can achieve."
But in an open letter to the deputy PM, Mr Rattenbury said the ACT was well on its way to hitting the renewables target.
"Crazy is denying the benefits of the ACT's investments in renewable energy projects across the country, including the Sapphire Wind Farm, which is coming soon to your electorate of New England," Mr Rattenbury wrote.
"Crazy is denying the least $10 million and up to 200 construction jobs this renewable project will bring to your local community.
"Crazy is throwing good money after bad by investing in coal when we know that renewables will secure our clean energy future."
The commission is expected to make its final ruling on retail electricity prices in June.
