From the Sydney Morning Herald - a further example of how the free market behaves in a when it comes to electricity.

Extra electricity costs may be passed on

Electricity companies intend to pass on any extra costs they face under an emissions trading scheme (ETS) while also accepting compensation from the Rudd government.

Clauses for "carbon adjustment" were now being added to future electricity supply contracts, according to a Fairfax report on Thursday.

A lobby group also says the move will see the coal-fired sector pass on the cost of tackling climate change to the consumer.

"A large amount of cash is going to be given to the coal-fired sector under the Rudd government's green paper, yet there will be no discount to consumers, says Total Environment Centre (TEC) director Jeff Angel.

"There's a simple way out of this - don't give the coal-fired generators any subsidies."

The TEC has obtained the December minutes of a meeting of the Australian Financial Markets Association, which shows the addition of "carbon adjustment" clauses was discussed for new electricity supply contracts.

Fairfax also said an anonymous business customer had said that when negotiating a new supply contract, a supplier insisted on a "pass through" clause for any new carbon-related costs.

"It wouldn't surprise me if it was being written into contracts now," Energy Supply Association of Australia chief executive Brad Page also says.

"At the moment there is a period of extreme uncertainty until we have a sense of what the carbon price will be.