electricity and retail gas prices

Howls of outrage over rising power prices are bound to grow louder in the months ahead, as the carbon tax pushes up electricity bills another notch.

What often gets lost in the fury, however, is that the increase caused by carbon pricing will be fairly minor compared with rises seen so far, which occurred for completely different reasons.

From July, the carbon price is expected to push up average household electricity costs by about 10 per cent.

Price rises are never popular, and the bitter political fight over carbon pricing ensures power bills grab plenty of publicity.

But compared with price rises we've already seen, the increase caused by carbon pricing may not be as radical as it seems.

As the graph shows, household energy costs have been rising for the past decade or so.

The lines representing gas and electricity prices, which originally started from the same index point of 100 in 1991, stayed quite flat in the 1990s, before taking off in the early 2000s.

Power-price inflation has been especially severe, hitting an annual rate of more than 15 per cent in 2010.

However, these increases had nothing to do with environmental policies.

Instead, the biggest reason for rising power costs has been infrastructure spending.

During the 1990s, spending on electricity poles and wires tended to lapse, and in the past decade the utility companies have frantically been playing catch-up.

The carbon price will add to these pressures and raise living costs for those who don't qualify for compensation.

But its initial impact will be fairly moderate compared with the surge we've already had.

However frustrating power price rises are, it's also worth bearing in mind that Australia's electricity costs are still reasonable compared with overseas.

Residents in New Zealand, Japan and much of Europe all pay more for power than we do, government figures show.

The ultimate arbiter of prices in the economy - the Reserve Bank - seems comfortable enough with this situation.

In a report from late 2010, the Reserve said power prices had indeed shot up and even impacted on inflation, but they were not ''particularly high'' compared with overseas.