NECA managing director Stephen Kelly called for prompt action from the Australian Competition and Consumer Commission to deal with such issues such as the blatant economic withholding of generation and the "gaming" of technical constraints.

According to industry insiders, the withdrawing of capacity at time of peak demand has in some cases caused wholesale supply prices to rise from around $40 a kilowatt hour to the maximum of $10,000 a kw/h.

While the practice is not illegal, it affects residential electricity tariffs because it pushes up the average realised price for wholesale electricity on which long-term contracts are based.

In South Australia, about 750,000 domestic power consumers were told to expect price rises of up to 30 per cent in their power bills after deregulation.

"No one can promise what future prices will be," the state's independent industry regulator Lew Owens warned. "I doubt the deregulated market will ever deliver cheaper electricity than the regulated market.

"But there is no way to unscramble the egg. The increases will be real."

Mr Owen added electricity retailers who believed in a free market should "respond appropriately" by going into business in South Australia. However he warned he would cap profits at 5%. Monopoly supplier AGL will face competition from January 1.