Coal companies will be required to provide cheaper feedstock for NSW power stations to help slash power bills as households cope with rising inflation.
NSW Treasurer and Energy Minister Matt Kean said the Albanese federal government had asked the state government to cap coal prices in order to place downward pressure on electricity costs, in response to soaring prices caused by the war in Ukraine.
"As a result of our efforts, federal Treasury analysis shows that future electricity prices for NSW have dropped by 41 per cent since the price caps were announced," Mr Kean said on Thursday.
The NSW government committed to a temporary $125-a-tonne cap on the price of coal sold to local power providers in December last year as part of the federal government's interventions in the energy market.
Mr Kean said this was a "modest ask of coal producers" who exported more than $61 billion worth of coal from Newcastle alone last year.
"Where possible, coal mines will be required to provide power stations with the amount of coal they have supplied in the past, and export-focused mines will be required to provide additional coal needed to meet any difference," he said.
Export-focused coal mines that are now covered by the expanded directions will be required to provide no more than five per cent of their production.
The Australian Energy Regulator, which has been tasked with monitoring and compliance, hailed the temporary cap as "vital to putting downward pressure on electricity prices and bringing relief for households and businesses".
The arrangements allow for coal mines to keep their pre-existing contracts intact, including evergreen contracts, to avoid impacting longstanding international commercial arrangements.
