Evoenergy wants to increase Canberrans' electricity bills by almost $300 a year, blaming the ACT's renewable energy and taxes.
The energy distributor said it was seeking the "substantial increase" due to a sharp rise in jurisdictional charges Evoenergy was paying as a result of the territory government's target of 100 per cent renewable energy.
Under the proposal, network charges for the average residential customer would increase by $5.44 a week, or $282.88 a year.
That would represent a 37 per cent increase in the cost of network charges.
Network and jurisdictional charges roughly make up 40 per cent of the overall energy bill for consumers.
For commercial customers, Evoenergy said the increased network charges would mean a rise of $1657 a year.
The proposal, published on Tuesday, has been sent through to the Australian Energy Regulator for approval.
A decision on approval is expected to be made in May.
If approved, the pricing changes would come into effect on July 1.
The ACT government has said the impacts from COVID were partly to blame for some of the market conditions that led to the proposal for the price hike.
Last year, the commission dropped prices by about 2.6 per cent after Evoenergy asked for a 1.8 per cent increase for residential customers.
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Evoenergy chief executive John Knox said the proposed price hike for this year was a significant one.
"We understand passing through any increase is difficult for the ACT community, let alone one of this size," Mr Knox said.
"The significant jurisdictional charge increase, combined with smaller transmission and distribution charge increases is expected to result in an average network increase of around 41 per cent."
The energy distributor said a key reason for the substantial increase was the 133 per cent rise in feed-in-tariff payments to large-scale wind and solar generators.
Those charges were expected to increase from $42 million for the current financial year to $127 million in 2021-22.
As part of the government's 100 per cent renewable target, solar and wind generators are paid for the energy they generate.
Payments are calculated by the difference between the feed-in tariff price and the wholesale electricity price.
ACT Energy Minister Shane Rattenbury said the drop in wholesale electricity prices was partly due to the impact of the pandemic.
"The cost of the ACT's feed-in tariff scheme has been well below forecast levels for several years, which has resulted in lower household electricity costs than would have otherwise occurred," Mr Rattenbury said.
"However, over the past year, in part due to the COVID-19 pandemic, there has been a significant drop in wholesale electricity prices, which will lead to an increase in the cost of the renewable energy scheme."
While Evoenergy said the impact to the average customer would be about $5 a week extra, the ACT Greens leader said the increase would instead be $3.70 a week more, or $192 a year.
"The average annual electricity bill for customers in the ACT will remain comparable with other jurisdictions, even once this anticipated cost increase is taken into account," Mr Rattenbury said.
"We will continue to work with Evoenergy to keep the cost of electricity as low as possible."
Evoenergy general manager Peter Billing said the energy distributor was unable to control the deals of the contract made between the territory government and solar and wind generators for the tariff scheme.
"No customer wants to see [the price increase] and we understand that," he said.
"We're very sympathetic to the impact on customers and we'll work with vulnerable customers to make sure we can provide whatever support we can."
Chief executive of the ACT Council of Social Service Emma Campbell said low-income households would be most affected by the changes.
"The ACT government must better monitor and manage the impact of the transition to net-zero greenhouse gas emissions on Canberrans on low income and facing disadvantage," she said.
"The Canberrans most impacted by the flagged electricity price increases will be those who are already struggling with their power bills."
ACT Opposition Leader Elizabeth Lee hit out at news of the price increase, saying the government promised cheaper power bills.
It comes after a report late last year predicted the ACT would be one of the few places where electricity bills were set to increase.
The Australian Energy Market Commission's 2020 report on residential electricity price trends showed across the nation, electricity bills were expected to fall by an average of $117 over the next three years.
Driving the savings was a 27.4 per cent fall expected in wholesale costs, as well as a 5.2 per cent reduction in environmental costs.
However, the average annual bill in the ACT was set to rise from $1967 in 2019-20 to $2011 in 2022-23.
The $44 increase comes despite a 13.4 per cent fall in the wholesale cost of electricity.
CORRECTION: A previous version of this story stated the proposal would be a 37 per cent of the average power bill. The 37 per cent increase was for the network charges, which makes up part of the overall power bill.
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