A proposed rate cut for electricity from next year has prompted calls for power companies to give customers compensation.

The Essential Services Commission of South Australia (ESCOSA) yesterday announced a proposal to reduce the wholesale electricity costs applying to standing AGL contracts.

This would apply to about a quarter of customers in South Australia and would equate to an annual saving of $160 for the average customer.

Senator Nick Xenophon said he wanted to see the cost savings apply other contracts as well, but asked why anyone should have to pay the higher rate until the reduction is introduced.

“If you’re paying too much right now, why should you wait three months for price relief?” he said.

“The best way around this is to make sure that consumers get a deeper discount in three months time to make up for the additional power prices they’re paying right now.”

His thoughts were echoed by Uniting Communities.

“We think it should be retrospective - at least for the past two years power companies have benefited from this,” said Simon Schrapel from Uniting Communities.

But the Essential Services Commission said compensation was not an option.

“The process that we work through goes both ways - if for example, we were proposing a price increase because wholesale prices had gone up, we would not compensate retailers going forward,” Commission CEO Paul Kerin said.