NSW Premier Barry O'Farrell says he is confident the independent pricing regulator is working to put downward pressure on power bills.
He was commenting after reports that power prices would have dropped this year if it wasn't for a proposed new charge designed to boost competition.
The Independent Pricing and Regulatory Tribunal (IPART) last month recommended an end to double-digit price hikes, with three per cent rises from July.
But the gains had been diluted by a new consumer acquisition charge, meaning bills could increase by more than $80 a year, News Ltd reports.
IPART wants retailers to be allowed to charge more than it costs to supply electricity to enable more of them to come into the market.
Mr O'Farell said the new charge was designed to increase competition, which could help put pressure on power prices.
"We trust IPART. We've made enormous savings within the network business which has reduced the cost pressures upon electricity prices," he told reporters on Thursday.
The premier also said a three per cent rise was still good news for consumers.
"For the first time in most people's memories, IPART's determined that power prices will only increase in line with inflation," he said.
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