The Tasmanian Economic Regulator Joe Dimasi approved the rise of 2.05 per cent from July 1, acknowledging Aurora Energy’s metering costs and the costs of meeting its Renewable Energy Target obligations.

As well as an increase to the residential customer annual bill, Mr Dimasi said small business customers would on average pay $45 more each year.

The government, though legislation, issued an order to the regulator that power prices could not rise about the Consumer Price Index for Hobart of 2.1 per cent.

Energy Minister Guy Barnett said the cap meant an annual saving of around $153 for the average Tasmanian household and $169 for the average business.

He said the rise would have been 10.6 per cent without intervention.