The Northern Territory Government says it will move ahead with a split of Power and Water, the corporation in charge of both utilities in the territory.

Power and Water will be broken apart despite posting a $41 million profit for the last financial year. A report now before the NT Legislative Assembly says it managed just $600,000 in profits the year before.

The report claims that the Federal Government's carbon tax cost Power and Water $25 million last financial year, though the tax had been intended to transform into an emissions trading scheme this year.

Treasurer Dave Tollner says regardless of the state of the carbon tax or Power and Water’s coffers, the government’s plan to slice it up will roll ahead.

“While it sounds good, a $41 million profit ... it is not an economic profit in real terms,” Tollner said.

“The company is still going backwards.

“There is a need for further efficiencies to be created.”

“We have locked in the [5 per cent] power [cost] increases that will occur for the next couple of years,” he added.

The Electrical Trades Union (ETU) sees the matter differently, saying the companies are to be split and their profits boosted to plump the value for an eventual sale.

ETU spokesperson Paul Kirby says the government is extracting as much as it can from the utilities before selling them on.

“It has happened around Australia and the rest of the word,” he said.

“Prices will go up traditionally before something is split up.

“Then prices will hold for a while, so people will think that it is not a bad idea.

“Then they [prices] will go through the roof once the private companies and their shareholders start to demand higher profits,” Mr Kirby said.