TASMANIAN power prices are set to fall following the introduction of retail competition into the electricity sector.
The independent Economic Regulator has approved a power price fall of 5.23 per cent from January 1 next year.
Premier Lara Giddings welcomed the "excellent news" yesterday, saying it would save the average household $140 a year and average small business $650 a year.
Ms Giddings said the reduction was possible from the energy reforms and cost-saving efforts by government business enterprises.
"Electricity bills are a big contributor to cost-of-living pressures and I am sure it will come as a relief to families, pensioners and low-income earners to know that prices will fall from next year," Ms Giddings said, adding prices would "remain flat or decrease for the foreseeable future".
Greens leader Nick McKim hailed the Greens influence on the energy reforms, saying he thought it could be added to a list of Greens accomplishments in government.
"We drove the establishment of the expert panel ... which has ultimately led us here today where we're seeing power prices come down, completely contrary to what we're seeing around the rest of the country," Mr McKim said.
While Ms Giddings trumpeted the decrease, Liberal energy spokesman Matt Groom said it was nothing to gloat about.
"Over the last seven years, power prices have increased by 65 per cent ... Labor has had over a decade to put downward pressure on power prices, but they had to be dragged kicking and screaming towards reform by the Liberals," Mr Groom said.
Ms Giddings said rises of recent years were due to essential investment in critical infrastructure, and had resulted in smaller price rises than other states.
Aurora raised Tasmanian prices by 1.8 per cent on July 1 this year.
While the news will be welcomed by consumers, energy industry analysts have previously warned it could lead to the government accepting a smaller price on its sale of Aurora Energy.
Frontier Economics director Danny Price, who was involved with the Tasmanian energy reforms, said the government regulation "will scare potential buyers and this will be reflected in the price they are prepared to pay [for Aurora]".