The Independent Competition and Regulatory Commission has recommended a 1.2 per cent increase, or $23 a year, to electricity prices for Canberra households from July 1 in its draft pricing determination.

But the regulator says if the carbon tax is repealed it could reduce pressure on prices by up to 12 per cent.

"In current circumstances the commission takes the view that any change in the price on carbon before July 1 is unlikely," senior commissioner Malcolm Gray said.

"Our prices for 2014-15 are, therefore, based on assuming the price on carbon remains."

But Mr Gray said it was "equally clear" that the removal of the carbon tax was likely to occur early in 2014-15.

He said the commission had included "flexibility mechanisms" in the pricing arrangements to try toensure any reductions in price flowed to consumers as quickly as possible.

The commissioner said that "considered in isolation" the complete removal of the price on carbon would reduce retail electricity prices in the ACT by about 12percent.

He warned, however, that complications could occur if the tax was abolished after the commission's proposed price increase was implemented as the law only permitted one price change every six months.

The commission's draft report also rejects a proposal for the introduction of a "competition allowance" in the ACT.

ACT electricity retailers wanted the regulator to raise prices by introducing a competition allowance to attract more utilities into the small territory market.

Electricity retailers had accused the regulator of keeping prices too low and consequently deterring newcomers into the ACT market, which was opened for competition in 2003.

But the ICRC's draft report found "a competition allowance at this time is not in the interests of ACT electricity consumers", and Mr Gray said it would "have the effect of pushing up the price of electricity in the territory in order to encourage competition".

The commissioner said changes to network charges by the Australian Energy Regulator could influence the ICRC's final determination, to be handed down on June 6, and that changes to network charges couldlead to a larger price increase.

Opposition treasury spokesman Brendan Smyth said that, at first glance, 1.2percent seemed like a small increase "when you add up the fact that they had to put water and sewerage prices up earlier in the year ... we know that come July 1 there's another huge slug to people's rates, it all adds up".

"The question is what will this government do to take the cost of living pressures off the ordinary taxpayer of the ACT?" Mr Smyth said.