A cut to NSW power bills will come at a heavy cost, with thousands of job losses predicted following a new ruling from the energy regulator.
Electricity bills are forecast to drop by hundreds of dollars over the next four years following Thursday's decision to cut the amount "poles and wires" companies can charge customers.
But Networks NSW chief Vince Graham has warned that at least 2500 jobs will go as Ausgrid, Endeavour Energy and Essential Energy are forced to cut costs.
The new limits imposed by the Australian Energy Regulator (AER) mean the annual average household bill for Essential Energy customers should drop by $313, or about 12 per cent, in 2015/16.
Ausgrid customers can expect to save $165, or eight per cent, Endeavour Energy customers $106, or 5.3 per cent, and TransGrid customers $25, or one per cent.
The AER said the decision came on the back of evidence showing the networks were not operating as efficiently as those in other states.
"This final determination reduces the spending proposal to ensure that only prudent and efficient costs are recovered from consumers," chairwoman Paula Conboy said in a statement.
"Any costs above efficient levels will need to be funded by the network owners, not customers."
Both sides of politics welcomed lower bills.
But the Baird government has raised concerns about how the decision might affect the safety and reliability of the networks, and backed calls from the companies for a period of transition.
Opposition Leader Luke Foley warned the decision would slash the price that the government would be able to get for the companies under its $20 billion privatisation plan.
"It stands to reason that if the companies are receiving 30 per cent less revenue and the return on the asset is also reduced, then the businesses are worth less," he said.
The decision slashes the revenue sought by Ausgrid by more than $3 billion, or about 33 per cent.
Endeavour will get $1.2 billion less than it sought, Essential $1.7 billion less and TransGrid $700 million less.
Mr Graham said Networks NSW, which comprises Ausgrid, Essential and Endeavour, would consider the implications of the decision.
"We dont want to risk community safety," he said.
