And if last week's collapse in the carbon price in Europe is sustained, this could result in prices falling even further.

On Tuesday, IPART estimated electricity prices will rise an average of just 3 per cent from July 1. Households in rural NSW will be the main beneficiaries with virtually no price rise expected after they suffered substantial increases over the past few years. Prices through much of central Sydney rose to a higher 4.3 per cent.

The forecast declines follow rises of more than 60 per cent in electricity prices in some parts of the state over the past three years.