Energy giant General Electric will open the first privately owned power station in the Northern Territory by the end of the year, but reduced prices for hard-hit consumers are not guaranteed.
The US-based conglomerate has been in talks with the government for 18 months about setting up private electricity generation, and legislation was passed in May to allow the separation of the retail and generation arms of the ailing Power and Water Corporation (PWC).
GE has already acquired government land next to Darwin's Weddell Power Station for its own power plant, which would generate about 60 megawatts, or 10 per cent of the total.
It hopes to have finalised the deal and to have begun two and a half years of construction by the end of this year, said Jason Willoughby, Managing Director of GE'S Project Finance division.
GE expects 60 jobs will be created during the construction phase, with about a dozen positions involved in the actual generation operation.
"We're confident we can make a pretty material reduction in that wholesale power cost," Mr Willoughby told reporters in Darwin on Friday.
He would not say which company would be supplying GE with the gas required to power the plant.
Minister for Essential Services Dave Tollner denied talks with GE early last year encouraged the government to forge ahead with the legislation to split up PWC, and said there was no deal done to guarantee a gas supply for the new power station.
"This decision of GE is a vote of confidence in the government's policy to structurally separate PWC and embrace a market system for electricity here in the NT," he said.
"This is a $200 million investment the NT government doesn't have to make, and it adds significantly to our power generation capacity."
He said "without a doubt" there would be a reduction in consumer costs but stopped short of guaranteeing prices would drop.
Prices skyrocketed by 30 per cent for Territorians last year, and will increase by another five per cent in January, which is hurting a population already paying four times more for power than the rest of Australia.
"We'll see greater efficiencies from PWC ... my hope would be we can maintain low electricity prices here in the NT and with any luck see a reduction in electricity prices in the longer term," Mr Tollner said.
But shadow minister for Essential Services Nicole Manison said there would be no drop.
"There's absolutely no doubt that the legislation to split PWC was rushed and rammed through," she said.
"The government could not show one skerrick of evidence for Territorians that this would lead to cheaper power bills for anyone."
She said previous privatisations in WA, Victoria and Queensland had resulted in higher power prices and less network reliability.