Residents are pushing the WA Government to set fairer electricity prices, after a new report found many were being over-charged for power by hundreds of dollars per year.

Independent think tank The Grattan Institute has issued a report saying WA power customers who use off-peak electricity are cross-subsidising those peak-time users.

Grattan’s energy program director Tony Wood says that if the true cost of electricity was reflected in the pricing structure, bills for people in remote areas would drop by an average of $275 a year.

Mr Wood says the current system is unfair.

“But those people who are using electricity in peak times, currently, are given no price incentives to do anything else, and people who don't use much electricity at peak times, they're paying for it,” he told ABC reporters.

“On average people in the south-west of Western Australia would save about $120 a year and some people would save up to $500 a year and for many people on low incomes - that's clearly a significant saving.”

Mr Wood said charging more at peak times would upset some users, but such a pricing scheme would beno different from other industries, such as airline travel.

“We all know that if we want to fly at certain times of the day, the week and the year it costs more,” he said.

“If you want to have a holiday, it costs more at certain times of the year, so it's not as though we are not used to paying for things this way.”

But he concedes it is a tough ask for the Government, as it risks angering customers who use power at peak times and those with big solar systems.

WA Energy Minister Mike Nahan says he is looking into the issue, and at what other states are doing.

“A major theme of the Grattan Institute report is fairness, and I am extremely supportive of fair tariffs to WA electricity consumers,” he said.

“It is imperative that consumers all over the country do not incur higher prices at the expense of those benefitting from emerging technologies.

“The current structure of network tariffs is one of the biggest issues facing the industry and is not unique to WA.

“I have asked the Public Utilities Office to provide me with advice on this issue and I will also raise these matters with my Council of Australian Government colleagues to see if we can get a national approach to dealing with this issue.”