Minister of Electricity and Energy Kgosientsho Ramokogopa has introduced a revised electricity pricing policy aimed at increasing bill transparency for consumers and eliminating so-called hidden costs.
According to the minister's statement, this policy is designed to address issues of affordability and ensure that consumers are not unduly burdened by costs arising from inefficiency, municipal debt, and non-payments.
The revised policy provides for the implementation of a more transparent and cost-reflecting tariff structure, whereby electricity bills must clearly indicate the calculation methodology for all charges. Ramokogopa emphasized that the goal is for consumers to see the exact amount they are paying instead of encountering undisclosed expenses.
Under the proposed system, bills will be divided into separate tariff components, including energy and generation costs, network transmission and distribution fees, ancillary services, and municipal surcharges. This will allow consumers to understand how electricity costs accumulate before receiving the final bill.
Ramokogopa noted that the system should allow for detailing how the municipality or Eskom arrived at the amount the consumer must pay.
Preventing the Transfer of Non-payer Debts to Law-abiding Consumers
The minister also opposed the practice of shifting costs related to non-payments and municipal debt onto consumers who regularly pay their bills. He pointed out that the current tariff structure allows Eskom to partially cover municipal debt through electricity tariffs, which places additional pressure on conscientious customers.
Ramokogopa stated: 'One cannot punish those who pay because of those who do not pay.' According to the minister, between one and two and a half percentage points of the current tariff is attributed to Eskom's inability to collect debts through municipalities. The new policy aims to exclude the transfer of these costs to consumers who pay their bills on time.
Free Basic Electricity
Furthermore, Ramokogopa announced that the policy will strengthen social protection measures for low-income and vulnerable households through the modernization of the free basic electricity administration system. The government plans to integrate electricity beneficiary information with existing databases of the Department of Home Affairs and Social Security to determine appropriate household criteria.
He noted that there is a high probability that a person receiving a social grant will also meet the requirements for receiving free basic electricity. The system will include an automatic annual review, allowing the household's eligibility to be reassessed as their life circumstances change.
The minister added that the current system creates a significant administrative burden on municipalities, especially large metropolises, which need to regularly update beneficiary databases.
Load Shedding Reduction Almost Eliminated
The presented policy comes against the backdrop of the government's statement about making progress in combating both load shedding and consumption reduction. Ramokogopa expressed confidence that the country has overcome the problem of outages and that the government can maintain the achieved pace.
He also announced that consumption reduction has been eliminated in seven out of nine provinces in the country, surpassing the government's October target. The Eastern Cape became the seventh province to achieve this goal last week.
The provinces of Gauteng and KwaZulu-Natal remain the two regions where consumption reduction is still being addressed, with an initial deadline set for March 2027. Nevertheless, Ramokogopa expressed confidence that the remaining work will be completed ahead of schedule, citing support from Gauteng Premier Panyisa Mkhize and KwaZulu-Natal Premier Themba Ntluli.
The minister stated that the government will provide public information on how it intends to prevent the return of consumption reduction.
Special Tariffs for Energy-Intensive Industries
The policy also provides for agreements on coordinated electricity tariffs aimed at protecting strategically important industries from closure and job losses. Ramokogopa reported that the government is already negotiating with large industrial electricity consumers, including metallurgical plants, and has disclosed discussions with Samancor and Glencore.
He mentioned that about seven other participants are being considered for preferential tariffs. The revised policy is intended to guide the work of the National Energy Regulator of South Africa (NERSA), Eskom, municipalities, and new participants in an increasingly liberalized electricity market.
Thus, the policy goes beyond the traditional system centered around Eskom and municipalities, including independent generators, traders, and parties entering into bilateral power supply agreements. The overall goal is to create an electricity pricing system that is transparent, efficient, and fair to consumers, while supporting vulnerable households and protecting productive sectors.