South Australian water bills could fall from July under a draft ruling from the state's independent regulator.
The Essential Services Commission of South Australia (ESCOSA) says a revenue cap to be applied to SA Water could cut average real water prices by 5.4 per cent.
Under the proposal total water bills would drop by 3.3 per cent, taking into account a 1.7 per cent rise in sewerage prices.
Commission chief executive Paul Kerin said the regulator did not expect to change water prices over the next three years.
It is expected SA Water's expenditure over that period to be $137 million less than the organisation proposed.
The draft proposal is now open for public consultation with a final ruling to be released in May.
The price cuts follow a series of big increases in recent years to pay for the construction of Adelaide's new desalination plant.
Premier Jay Weatherill said the state government would work through the detail of the draft ruling in a bid to deliver savings to consumers.
"This government understands the concerns South Australians have about cost of living pressures," Mr Weatherill said.
But Opposition Leader Steven Marshall said in order to deliver the proposed cuts SA Water would need to cut millions from its operational costs.