Household electricity bills are poised to be cut up to 8 per cent - or $126 a year on average - as the new Senate moves to axe the carbon tax within days.
State Government-owned power retailer Synergy confirmed yesterday it would pass on the savings from the abolition of the tax in full as well as refund any carbon charges paid since July 1.
Horizon Power, the stablemate of Synergy which provides energy to remote areas, echoed the pledge. A typical household pays $1586 a year in electricity, according to Synergy, including about $10.50 a month in carbon charges.
After natural gas retailer Kleenheat removed the carbon tax component from bills in anticipation of its repeal, rival Alinta said it would follow suit.
Cuts to household gas bills are expected to be smaller than for electricity. However, they could be up to 7 per cent.
The promises from the energy providers came as Palmer United Party Senate leader Glenn Lazarus yesterday made clear his party would support the Federal Government in scrapping the tax and unveiled its own amendments.
Under PUP's proposals, firms would have to provide a "carbon tax removal substantiation statement" showing how much had been saved and how much had been passed on to consumers.
Firms that failed to pass on in full the carbon tax savings would face fines up to $17,000.
The Abbott Government is facing fresh problems in ditching other parts of the former Gillard government's program to cut greenhouse gases.
Motoring Enthusiast Party senator Ricky Muir has moved an amendment that would stop the Government's plan to cut funding to the Australian Renewable Energy Agency.
It had hoped to cut $435 million from the agency and effectively abolish it.