The O’Farrell government says prices will go down. Labor says they will go up. The Dubbo City Council and the local pensioners group say they cannot predict the effect. 

 MP Troy Grant hit out at Labor claims a deregulated electricity industry would lead to price spikes. 

The government revealed on Monday the state’s pricing regulator would no longer set maximum prices  for regulated energy suppliers from July 1. 

Labor has accused the O’Farrell government of removing a “safety net” for low-income earners. 

But Mr Grant said Labor could not be trusted on electricity prices. 

“At the end of the day, [Opposition Leader] John Robertson says this sort of stuff and has just got no credibility,” he said. 

“This is a guy who was instrumental when he was in the Electrical Trades Union of basically throwing out two premiers over the issue of electricity deregulation.”

Mr Grant said the new market would be more competitive and cut $300 to $400 in regulation costs from the average annual bill. 

“There is real evidence that there could be an instant decrease in prices,” he said.

The government will achieve an instant decrease for customers on regulated contracts by mandating they have access to a year-long “transitional tariff” 1.5 per cent cheaper than their current contracts. 

Labor Energy spokesman Ron Hoenig said: “Barry O’Farrell and the energy retailers are trying to bribe households in the short term before the March 2015 election”.

“Once the electricity retailers have no regulated rate or there is no safety net for consumers, retailers will have a blank cheque to charge households or businesses whatever they like.”

Mr Hoenig said the “cash grab” would lead to market uncertainty, hitting rural areas hardest. 

“People in the regions need more stability in their lives than anyone,” he said. 

Ken Windsor, president of the Orana Combined Pensioners and Superannuants Association, said it was too early to tell how prices might trend. 

“There would have to be some very good guidelines to make deregulation useful to pensioners,” he said. 

Mr Windsor said genuine competition would require low termination fees and easy to read contracts.

The Independent Pricing and Regulatory Tribunal last year argued to reduce its own power.

“Since we made our last determination in 2010, the competiveness of the retail electricity market in NSW has increased,” the tribunal wrote in a July report.

“Compared to the alternative of a regulated market with a limited number of retailers competing for customers, a competitive market will better allocate resources, and lead to lower prices and improved product offerings.”

LJW Solar regional manager Michael Joseit said while residential demand for solar had slackened in recent years, business demand was up.

He expected electricity price rises would keep solar demand strong even if government no longer provided incentives and subsidies. 

“Even though there will be a bit more competition out there [with deregulation] I don’t think prices are going to get any cheaper,” he said.