South Australian household water prices will be cut by an average of $51 a year from next financial year.

SA Water is seeking to lower water and sewerage prices by 3.9 per cent next year.

“The term of the regulatory period is actually four years, 2016 to 2020, and what we are putting forward is for a reduction of an average of 3.9 per cent of a household's bill, water and sewerage, for the first year and then no greater than CPI increases for the following three years,” chief executive John Ringham told reporters this week.

He said the business had reduced operating costs, and would pass on the savings.

“We've done a lot of work internally to drive efficiencies, restructured the business and reduced our costs,” he said.

“We've done some innovative ways to purchase energy which has reduced our operating costs.”

SA Water executives recognised consumers were struggling with the cost of living earlier this year.

Chairman Lew Owens said it led the utility to cut 150 staff and find other savings.

The Essential Services Commission of SA last year claimed households were collectively paying $150 million a year too much for water, after the State Treasury predicted a higher annual demand than ESCOSA.