Uncertainty over electricity prices

Uncertain times for electricity prices 16000646 800467875 0 0 7054829 300

Political debate has continued over comments concerning expected increases in electricity prices once the carbon tax is introduced.

Minister for climate change and energy efficiency Greg Combet has responded to claims from opposition leader Tony Abbot that were made on a tour of Tasmania on Friday (August 26).

After declaring that a Tasmanian small wetsuit business' electricity bill would increase by "at least $100 a month under the carbon tax," Combet has responded to the claims.

Combet says: "Mr Abbott has no basis to claim electricity prices at a small business like Anchor Wetsuits will rise more than 20 per cent."

He asserts: "Treasury modelling shows retail electricity prices in Tasmania will rise by nine per cent under a carbon price."

The comments come after an independent analysis provider has forecast that the impact of the carbon tax on electricity may be smaller than first thought.

Bloomberg New Energy Finance has released a report which predicts that the price on carbon will drop to $16 by the year 2016, once the emissions trading scheme begins.

According to Bloomberg: "This result contrasts with modelling by the Federal Treasury … and means that the effect of the carbon price on electricity prices, businesses and households is likely to be weaker than expected."