The cost of electricity is set to increase by about $244 a house in Canberra, or almost 20 per cent, with the Federal Government's carbon tax making up more than 75 per cent of the jump.
But the ACT Government says most Canberra families will get benefits from the Federal Government to help cover the higher costs.
In its draft pricing decision issued this morning, the ACT Independent Competition and Regulatory Commission says that about $3.65 of an expected average household weekly increase of $4.70 is attributable to the carbon tax.
The proposed price increase will begin on July 1. Submissions on the proposed increase are sought by the commission by May 8.
Senior commissioner Malcolm Gray said that under the commission's draft price direction, regulated electricity prices would increase by 17.22 per cent.
"The rise in regulated retail tariffs is largely attributable to increases in the cost of wholesale electricity with a smaller contribution coming from network fees," Mr Gray said.
"It would appear that the increase in the cost of wholesale electricity is almost entirely attributable to the introduction of a price on carbon by the Australian Government."
The terms of reference required the commission to set a price for two years. Instead, its draft price direction is for only 12 months.
Mr Gray foreshadowed the commission would review the operation of the wholesale electricity market during 2012-13, once the price on carbon had taken effect, before preparing a price direction for 2013-14.
ACT Opposition Leader Zed Seselja said in a statement that he was “very concerned about the Canberrans who will cop this massive cost of living hit from the Labor Government”.
“Today’s hit comes her after government has already doubled rates in many suburbs, will add $225 to bills to pay for the solar feed-in tariff, and have tripled water bills, with more increases to come due to their inability to manage the Cotter Dam,” he said.
“If it weren’t for the Labor/Green’s massive carbon tax, Canberrans’ electricity bills would only have increased by $55. Instead, they’re being slugged with a $189 carbon tax component.”
Environment Minister Simon Corbell said about 80 per cent of Canberra households would receive carbon tax compensation from the Commonwealth and that would help cushion them from the price increase.
"It's important that we continue to work to reduce the cost of electricity for Canberra households,'' Mr Corbell said.
“That's why we welcome the on average about $600 a year that Canberra householders will receive from the Federal Government. And it's why the ACT Government has provided over $226 a year for low-income households to help them with their electricity costs.’’
An energy efficiency bill being debated in the Assembly would also help to reduce electricity bills by about $300 before 2015 by helping people to replace old inefficient appliances and install measures such as insulation and sealing.
ACT electricity bills were forecast to remain on average almost one third below those faced by equivalent households in NSW, Mr Corbell said.