A report released by the SA Ombudsman has found the Coober Pedy Council charged Aboriginal residents "extremely" high bills due to its own mismanagement, leaving them with "outrageous" debts.
The report detailed how the Council disconnected electricity to some customers, including at least one cut off on a Friday, without offering payment plans.
Financial manager at Aboriginal Legal Rights Movement Port Augusta office Ralph Coulthard said the council should wipe the debts accumulated by locals, who he says lived in hardship as a result of the council's behaviour.
“I think a waiver or part waiver of these outrageous power bills be considered," he told NITV News.
Mr Coulthard raised the alarm on what the council was doing after an Elder called him to ask for help with a $12,000 bill.
“He was an elderly man in his 60's. English was his second or third language, he didn't read or write and he didn't understand the bill that he had received, which was in excess of $12,000," said Mr Coulthard.
“This elderly gentleman was threatened with disconnection of his power as well."
Mr Coulthard said after that first case, dozens of the town's Aboriginal community who were subjected to the same treatment by the council approached him for help.
"From that one man, probably within a couple of days there were 50 people that had the same issues, enquiries and fears, and that's when my alarm bells rang," he said.
Mr Coulthard said that members of the non-Indigenous community also received the same treatment and requested assistance, but that his organisation could only help Aboriginal residents.
"But I hope the outcome of this investigation benefits the whole community."
South Australian Ombudsman Wayne Lines said there were at least six people with debts of between $9000 and $15,500.
He said the council appeared to have broken the law by disconnecting community members’ power without first offering instalment plans for their unpaid bills.
"At the core of this investigation is the very serious concern that Aboriginal community members of Coober Pedy have been allowed to accumulate considerable debts in relation to their electricity and water accounts," Mr Lines said in his report published on Monday.
"This in turn has had a significant impact on their quality of life.
"These debts appear to have accumulated over several years until the council determined that action needed to be taken to recover the amounts owed.
"In seeking to recover the amounts owed, the council has created hardship agreements that require oppressively high payments to be made by community members."
The Coober Pedy Council is currently being run by a state government-appointed administrator and Mr Lines noted that the issues with electricity and water charges occurred largely before that change.
Among his recommendations were that the government consider alternative options to the council for the supply of electricity and water.
Mr Lines also urged the council to consider writing off some debts and to work on better communication with the Aboriginal community.
Premier Steven Marshall said the government was looking at both the report and its recommendations.
He said the Cooper Pedy region was a "precious" part of South Australia with some unique challenges.