The price of electricity for AGL customers in South Australia is set to rise by about $200 a year from next month.

The company, which is the largest electricity supplier in the state, has partly blamed the 10 per cent increase on the closure of Alinta's power stations in Port Augusta.

It said the availability of coal and gas for power generation has had an impact on its costs.

But Treasurer Tom Koutsantonis rejected the explanation.

He said coal prices were dropping and AGL was trying to protect its shareholders due to a decrease in demand.

Mr Koutsantonis, who admitted he was an AGL customer, urged people to shop around for another provider.

"I'm with AGL and my wife and I will be making the decision about whether we stay," Mr Koutsantonis said.

"Don't accept this increase from AGL, start ringing around and try the other power companies, see what they have to offer.

"Now is the opportunity for those other companies that have a much smaller market share than AGL to really step up to the plate and take South Australian customers."

Mr Koutsantonis said the lack of interstate interconnectors, limiting the state's ability to sell power, was also a factor.

The SA Government yesterday announced it would provide $500,000 to fund a feasibility study into building a second interconnector.

Government's energy policies 'destabilise' electricity market

But the state's Opposition has blamed the Government for AGL's price hike.

Opposition spokesperson Dan Van Holst Pelekaan said the State Government's renewable energy policies were to blame.

"The Government has been overzealous with regard to permissions for wind energy and unfortunately wind energy without storage destabilises the electricity market," he said.

South Australian Council of Social Services chief executive officer Ross Womersley is concerned the higher charges will worsen the burden on families already struggling to make ends meet.

Mr Womersley said AGL needed to be more explicit in justifying the increase, especially when a recent ruling by the Australian Energy Regulator was supposed to lead to savings.

"In fact it eclipses that saving by more than anything we've managed to achieve, so this means that power prices in real times are going up for anybody on a standing contract in South Australia," Mr Womersley said.