Thousands of South Australian households and small businesses will get cheaper power bills from July.

The Australian Energy Regulator cut the default market offer by up to 7.3 per cent for households and by 8.9 per cent for small businesses on Thursday,

The changes could save households about $109 a year and businesses up to $815.

“These substantial falls in default market offers provide further positive signals about the price of electricity for all South Australian households and businesses,” Energy Minister Dan van Holst Pellekaan said.

“Reductions in the default market offer generate falls in all other retail prices which are benchmarked off it.”

The default market offer sets the maximum price a retailer can charge the approximately 75,000 small electricity customers on standing contracts.

All customers are still free to negotiate better details with energy retailers.