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Next round of electricity price rises ahead

Less than a day after the Prime Minister flagged plans to shave $250 off the annual household electricity bill, NSW households are facing a new round of power price rises which will absorb much of the proposed savings.

One of the largest electricity suppliers to NSW, the Hong Kong-owned EnergyAustralia, has outlined plans to raise prices by up to 10.5 per cent over the next three years.

The proposed rises come hard on the heels of increases of up to 20 per cent implemented from July 1, which were sparked largely by the need to upgrade the electricity network, leading to criticism of '‘gold plating'’, as power companies over spend on the upgrades.

The proposed increases to electricity prices also follow gas retailer AGL putting forward plans to hike household gas prices by 10.4 per cent from mid-2013.

Addressing a forum earlier today held by the NSW pricing regulator IPART, the Independent Pricing and Regulatory Tribunal, EnergyAustralia outlined a proposal to raise prices by up to 4.5 per cent from July 1, 2013, by up to a further 3 per cent from July 1, 2014 and a further maximum of 3 per cent from July 1, 2015.

‘‘These are required to support an efficient energy sector,’’ EnergyAustralia’s group executive manager retail  Adrian Merrick, told the forum.

The proposed increases come as wholesale electricity prices remain weak due to soft demand following sharp electricity price rises in recent years, along with falling demand from industry in the wake of the strong Australian dollar which has pressured exports.

At the weekend, Prime Minister Julia Gillard outlined a range of measures aimed at curbing over-investment by electricity companies which, she said, could cut the annual household electricity bill by $250, if implemented.