Sydney households could be forced to pay more for desalinated water under a plan developed by the New South Wales Finance Minister Greg Pearce.

The operator of Sydney's desalination plant pre-purchases renewable electricity and sells the surplus power when it is not needed or production is wound back.

Greg Pearce has written to the Independent Pricing and Regulatory Tribunal (IPART) suggesting changes which would mean if the operator makes a loss during the electricity re-sale it can recover its cost by raising water bills.

Labor's Luke Foley believes it is linked the privatisation of the desal plant.

"This just piles misery upon misery for households in Sydney," he said.

"For the first time the O'Farrell Government has changed the rules of the game."

Greg Pearce says consumers could benefit if a profit is made on the sale of excess electricity.

However Mr Foley thinks that is highly unlikely because the desal operator will be a distressed seller.