The SA Government says a proposal that about 25 per cent of South Australian electricity customers pay a lower rate next year should be extended to all customers on market deals.

A draft determination from the Essential Services Commission of SA (ESCOSA) would significantly reduce the allowance for wholesale electricity costs applying to standing AGL contracts in the state.

A final determination will be made in early December and the reduction would take effect from the start of next year, if approved.

The lower rate would apply those small businesses and households with standing contracts, rather than market contracts with AGL or other retailers which are not price regulated by the Commission.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 5 minutes 20 seconds 5 m Paul Kerin of ESCOSA talks to 891 ABC Download 2.4 MB

Its CEO Paul Kerin said customers would see a significant saving.

"ESCOSA proposes an 8.1 per cent standing contract price reduction, which we anticipate will reduce an average household's bill by around $160 a year," he said.

"We have done this because the estimate of wholesale costs now is lower than the current wholesale cost allowance."

SA Energy Minister Tom Koutsantonis said he believed the draft determination would lead to pressure on retailers also to reduce charges for the majority of customers who were on market contracts.

"If the independent analysis of wholesale prices has found that wholesale electricity is being charged at a too high a rate, I see standing contracts as being the ceiling rather than the floor and that means everyone below should go down accordingly as well," he said.

"Everyone on a standing contract will have to go down by 8.1 per cent but I imagine, with the Government bringing in legislation to abolish exit fees, you'll see retailers following suit very, very quickly or suffer the consequences of having their customers change to people who do lower prices."

Premier Jay Weatherill said he wanted all energy companies to pass on the power price cut to all their customers.

"It's something they can do. It's something they should do and it's something I demand of them," he said.

The SA Council of Social Service said a reduction in prices was long overdue.

Greens leader Mark Parnell welcomed the prospect of some relief for some SA households.

"Finally sanity has prevailed. We have the lowest wholesale electricity prices in South Australia in eight years yet the retail price has continued to soar," he said.

"The Greens are delighted the fall in wholesale prices, mainly driven by wind and solar, is finally being passed on to long-suffering consumers."