West Australian households can expect higher bills later this year, despite sweeping changes to an oversupplied energy market that aim to slash supply costs.
Treasurer Mike Nahan has indicated bills will rise in line with the inflation rate.
"All I can say is the CPI is very low ... about 1.5 (per cent)," Dr Nahan told reporters on Thursday.
"But we are trying to keep everything else benchmarked to CPI.
"Some (costs) will go up more and some will go up less. We'll see in the budget."
The Treasurer announced plans to dramatically cut the cost of power generation in an oversupplied market, with the taxpayer-funded subsidy to state-owned energy utilities to eventually fall by $500 per household per year.
Dr Nahan said more than 1000 megawatts of electricity - enough to power up to 750,000 homes on a hot summer's day - were being generated unnecessarily.
Synergy, Horizon and Western Power would be run more cost effectively, he said, saving some $500 million a year when the plans were fully implemented.
Synergy will be ordered to reduce its operating capacity by 380MW, cutting back on coal and gas, and possibly mothballing part of Stage C at the Muja power station near Collie.
He said the oversupply was the result of measures taken a decade ago in response to power shortages that had led to blackouts, and the state government was rightly concerned at the time, given WA's rising population.
It built power stations and introduced a scheme that paid more than 300 companies in exchange for them promising to reduce their consumption when asked in times of peak demand, but not all of that was needed any more, Dr Nahan said.
After a surge in domestic solar power generation, the scheme was barely used, costing taxpayers hundreds of millions of dollars.
Dr Nahan suggested some participants in the scheme - including an aged-care home in Albany - expected they would never be called upon and had raked in money for nothing.
Prices paid under the scheme will accordingly be slashed from $120,000 per MW to about $17,000/MW.
Participants could make up their own mind whether they wanted to stay in the scheme or not, Dr Nahan said.
The most significant additional cost to consumers in this year's budget will be the $90 charge for the new no-fault insurance scheme, he said.
