The Australian Energy Regulator on Thursday released its final default market offer (DMO) determination for the 2024/25 financial year.

It ruled that year-on-year electricity prices drop between $41 and $63 for some South Australian households, and $512 for some small businesses.

The drops are slightly higher than the regulator flagged in its draft determination in March.

The DMO is a regulated price cap that sets the maximum price energy retailers can charge customers who have not shopped around for a better deal.

There are around 61,000 residential customers on the DMO in South Australia (7.6 per cent of the market) and 14,000 small businesses (16.7 per cent). The majority of customers are on market contracts, with the DMO acting as a comparison point.

South Australian DMO customers using 4000 kilowatt-hours a year will see their annual prices drop 2.8 per cent ($63) to $2216.

DMO customers with controlled load – separately metered tariffs used for appliances such as electric hot water storage systems – will see a 1.5 per cent decrease ($41) to $2746.

The lower prices are on top of the $300 in energy bill relief the federal government is giving all Australian households next financial year.

But it also comes after two successive price hikes from the regulator. This included a $124 to $198 increase for some South Australian households in 2022/23 and a $439 to $512 increase in 2023/24.

The South Australian Council of Social Services said that next financial year’s DMO is still around 20 per cent higher than the cap in 2022/23.*

“SACOSS welcomes the slight reduction in the DMO and the AER prioritising affordability and cost-of-living considerations in its determination,” the peak body said.

“However, this reduction is not outweighed by the much bigger DMO increase of 23.9 per cent for 2023/24, and the potential for the DMO stabilising at higher price levels in South Australia.”

In its final determination released today, the regulator said that it could lower the DMO in South Australia due to lower wholesale power prices.

There was an increase in distribution costs from SA Power Networks due to inflation and the River Murray flood event, the regulator said, which partially offset the savings from lower wholesale prices.

The Malinauskas Government said the lower wholesale costs was driven by more supply from renewable energy projects and the federal government’s cap on gas prices.

“We are building a cleaner, more affordable and reliable energy system and these cuts to consumer bills prove we are getting it right,” Energy and Mining Minister Tom Koutsantonis said.

“The complacent Marshall Liberal government bet everything on connecting SA to NSW – where wholesale prices are higher and reliability concerns are bigger and more urgent.”

Koutsantonis’ office also noted that the 8.8 per cent drop in the DMO for South Australian small businesses was the highest price cap drop of any jurisdiction under the DMO.

A state by state comparison of energy prices for households in SA (bottom) against NSW (Ausgrid, Endeavour Energy and Essential Energy) and South East Queensland (Energex). Table: Australian Energy Regulator

Opposition energy spokesman Stephen Patterson said the regulator decision shows “electricity prices remain in record territory in South Australia… and small businesses are still paying more than those in Sydney, Melbourne and Brisbane”.

“Any reduction in prices is welcomed but South Australian working families and small businesses still face another year of sky-high electricity bills while Peter Malinauskas arrogantly refuses to reveal his plan to fight the cost of living crisis,” he said.

The state budget, which is expected to contain some further cost of living measures, will be handed down on June 6.

*An earlier version of this story incorrectly stated the 2024/25 DMO was 30 per cent higher than 2022/23.