POWER bills will be slashed, with the state government banning over-investment by electricity companies.
In a speech to the industry today, NSW Energy Minister Chris Hartcher will announce he will stop electricity companies upgrading their infrastructure unnecessarily, or "gold-plating" the network.
Mr Hartcher told the Daily Telegraph he promised this would cut power bills for NSW families and businesses.
"Given network costs are responsible for around 50 per cent of a power bill, these additional savings will continue to place downward pressure on electricity prices for customers after being hit with Labor's legacy of double-digit price hikes,'' Mr Hartcher said.
Mr Hartcher will tell the industry today that, after a 2009 state government decision to sign off on $15.3 billion in network upgrades, consumers saw rising energy prices for five years.
''For too long the energy industry has tried to fly under the radar. Well, people are noticing. And it's time to step up,'' he said.
``The customer out there is far more knowledgeable than we give them credit for - and we need to help them utilise that knowledge so it delivers better outcomes right along the line.''
The government announced in April that, after the merger of Ausgrid, Endeavour Energy and Essential Energy, households would see savings of $2.5 billion, allowing electricity prices to be capped at or below inflation.
In the past five years, the average household electricity bill has risen between 37 and 80 per cent.
Mr Hartcher said that the merger and the review of "gold-plating" had led to price rises only increasing by 1.7 per cent this year, compared with 18 per cent last year.
Mr Hartcher said the ban on over- investment would not reduce the reliability of electricity in NSW.
''That means investment will now be delivered only when necessary and only when appropriate - and not driven by arbitrary design criteria that tells businesses how many poles to build here and how many substations to build there,'' Mr Harcher said.
''Existing licence conditions will be modified to remove the design planning criteria, but retain the existing targets - the average and individual powerline outage number and duration targets - and will come into effect on 1 July 2014."
Mr Hartcher said these changes would add at least $200 million in savings on top of the $2.5 billion saved through the merger of the electricity companies.