Premier Colin Barnett is pushing for a big surge in electricity charges in his campaign to bring utility prices in line with their production costs even as he convinced Rio Tinto and BHP Billiton to pay higher royalty rates that would further boost the coffers of Western Australia.

Electricity tariff for household consumers and industrial use is expected to increase by 10 percent in the new financial year while water charges for the average WA household are scheduled to go up by 17.7 percent come 2010/11.

The state government last lifted the electricity tariff by 7.5 percent in April as it acknowledged that low income households may be affected so it is also set to increase government's hardship payment from $408 to $450 starting July 1.

The state opposition, unions and community groups have scored Barnett's move, arguing that many residents of the state would find it hard to meet the higher bills that would be introduced by his campaign, notwithstanding the additional hardship payment offered by the state government.

Still, Mr Barnett went ahead with his plan and even reached a deal with BHP and Rio Tinto last week for the two mining giants to pay a higher royalty rate to the state and by July 1, the two companies would pay 5.625 percent in iron ore fines royalties.

Mining companies have been paying 3.75 concession rate since the 1960s as the government allowed them some leeway in recognition of their infrastructure contributions such as roads, ports and townships in the mining regions.

Also back then, iron ore fines were not that highly valued wherein today the state regards them as key iron ore commodity.