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Power retailers reject Abbott claim on carbon tax

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Energy retailers say consumers won't see instant cuts in their power bills if the carbon tax is abolished.

Opposition Leader Tony Abbott insists the scrapping of the government's carbon pricing laws under a future coalition government would "instantly" reduce electricity bills by 10 per cent.

But Energy Retailers Association of Australia chief Cameron O'Reilly says that's not the case.

"If the carbon price was repealed, customers would not see an instant decrease in their energy bills," Mr O'Reilly told AAP on Monday.

"Legislative changes and regulatory reviews would have to take place prior to changes in the price."

Retailers would then need to review their pricing and notify customers.

Mr O'Reilly said the abolition of the tax would impact on customer bills in different ways because of the variety of contracts in the market.

The carbon component of the wholesale price, which retailers pass on to customers, involves energy from a range of sources such as coal, gas, hydro and wind - all with different carbon intensities.

"Also there are a number of assumptions about how this is passed on to the consumer," Mr O'Reilly said.

Estimates and modelling of the potential impact of the carbon price varied between state and federal governments as well as industry.

Retailers had also locked in the carbon price in "hedges", so that could also take time to flow through.

Network and wholesale costs and green schemes had contributed to recent price rises in energy bills, Mr O'Reilly said.

AAP

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