Electricity pricing reforms

The Northern Territory Government continues to subsidise electricity for households and businesses through the electricity uniform tariff community service obligation (CSO). The CSO covers the gap between regulated electricity prices paid by customers and the actual cost of supplying electricity across the Territory.

Electricity supply costs have continued to rise faster than prices over time, and in June 2025 the government announced staged electricity pricing reforms to ensure subsidies remain affordable, sustainable and targeted to customers with the greatest need.

Wholesale electricity costs are expected to increase further in 2026‑27 due to:

• higher network prices reflecting decisions by the Australian Energy Regulator
• increased thermal generation costs as the Territory’s gas supply transitions to new gas contracts following the decline in production from the Blacktip gas field and higher diesel fuel prices.

Government has worked with Territory Generation to smooth these impacts so the increases will be staggered over time. Commercial and industrial customers with consumption over 750MWh per annum are not subsidised by government and will face higher bills in 2026‑27 as these costs flow through.

The impact of price increases on large commercial and industrial customers will vary by location and use profile. In Darwin‑Katherine, Territory Generation’s thermal generation costs make up a small share of total electricity bills due to comparatively lower wholesale costs and the presence of lower cost private solar and gas generation. Customers in Tennant Creek and Alice Springs are more exposed to Territory Generation’s price increases as generation costs are higher and represent a larger proportion of total electricity costs.

For the majority of customers under the pricing order (households and small to medium businesses), government is increasing its investment in the CSO to $224.6 million to cap these cost impacts at 5.3%. This will help maintain affordable and reliable power while managing unavoidable cost pressures in a responsible and transparent way. Without the uniform tariff CSO, the average household electricity bill would be around 74% higher and commercial customers would pay about 34% more.

The next stage of electricity pricing reforms will commence on 1 July 2026 and includes:

• a revised residential electricity threshold of 164kWh per day averaged across the billing period
• fixed daily charges for high-voltage customers moving to cost-reflective levels
• new local government council tariff arrangements comprising:
  • a regulated local government council tariff in the electricity pricing order, applying a 30% uplift to 2025‑26 rates for grid-connected councils
  • a decision to maintain the current tariff indexation of 5.3% for council sites serviced by Indigenous Essential Services.

The revised 164kWh threshold has been set significantly higher than originally proposed to reduce the number of customers affected and support Territorian with ongoing cost-of-living pressures.

Most Territory households will not be affected by the residential threshold changes. The average Territory household uses around 23kWh of electricity per day, well below the new 164kWh threshold.

Local government councils were proposed originally to transition to cost-reflective tariffs from 1 July 2026. Following further consideration and stakeholder feedback, government has approved the revised approach from 1 July 2026.

This change balances fiscal responsibility with impacts on councils' service delivery and rate setting.