South Africa’s electricity and energy minister Kgosientsho Ramokgopa on Tuesday unveiled sweeping reforms to the country’s electricity pricing policy aimed at giving consumers greater transparency over what they pay for power.
At a press briefing, Ramokgopa said the policy sought to improve affordability and ensure consumers were not unfairly burdened by costs arising from inefficiencies, municipal debt and non-payment.
The revised policy would introduce a more transparent and cost-reflective electricity tariff structure, with electricity bills required to clearly show how charges are calculated.
“What we’re also doing with the pricing policies is to provide a framework for transparent and efficient cost-reflective tariffs,” Ramokgopa said.
He said the aim was to ensure consumers could see exactly what they were paying for rather than being subjected to undisclosed costs.
Under the proposed system, electricity bills would be unbundled to show individual components of the tariff, including energy and generation costs, transmission and distribution network charges, ancillary services and municipal surcharges.
Ramokgopa said this would allow consumers to understand how electricity costs accumulated before reaching their final bills.
“It must be able to itemise how the municipality or Eskom has arrived at that which they say you owe the municipality or you owe Eskom,” he said.
The minister also criticised the practice of passing the cost of non-payment and municipal debt on to consumers who consistently pay their electricity bills.
He said the current tariff structure allows Eskom to recover some municipal debt through electricity tariffs, effectively placing additional pressure on compliant consumers.
“You are not allowed to punish those who are paying on account of those who are not paying,” Ramokgopa said.
According to the minister, between 1 and 2.5 percentage points of the current tariff could be attributed to Eskom’s inability to recover money owed through municipalities.
The revised policy is intended to prevent such costs from being shifted to consumers who pay their accounts.
Ramokgopa said the policy would also strengthen social protection measures for poor and vulnerable households through a modernised system for administering free basic electricity.
The government plans to integrate electricity beneficiary information with existing Home Affairs and social grant databases to identify households that qualify.
“So there’s a good chance someone who qualifies on a social grant, the person is most likely to also qualify for free basic electricity,” he said.
The system would include automated annual verification, allowing households’ eligibility to be reassessed as their circumstances change.
Ramokgopa said the current system places a significant administrative burden on municipalities, particularly large metropolitan municipalities, which must regularly update their beneficiary databases.
The revised pricing policy comes as the government says it has made progress in tackling both load shedding and load reduction.
Ramokgopa said the country had effectively turned the corner on load shedding and that the government was confident it could maintain the progress.
“I’m confident that we are going to maintain this momentum going into the future and we’ll speak of load shedding in the past tense,” he said.
He also announced that load reduction had been eliminated in seven of the country’s nine provinces, ahead of the government’s October target.
The Eastern Cape became the seventh province to achieve the milestone last week.
Gauteng and KwaZulu-Natal remain the two provinces where load reduction is still being addressed, with the government previously setting a March 2027 deadline.
However, Ramokgopa said he was confident the remaining work could be completed ahead of schedule, citing support from Gauteng Premier Panyaza Lesufi and KwaZulu-Natal Premier Thami Ntuli.
The minister said the government would provide further details on how it intended to prevent load reduction from returning.
The policy will also provide for negotiated electricity pricing agreements aimed at protecting strategically important industries from closure and job losses.
Ramokgopa said the government was already engaging with major industrial electricity users, including smelters, and had made public its discussions with Samancor and Glencore.
He said about seven other companies were being considered for concessional 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 the increasingly liberalised electricity market.
The policy would therefore extend beyond the traditional Eskom-and-municipality-centred electricity system to include independent generators, traders and parties entering into bilateral electricity supply agreements.
Ramokgopa said the overarching objective was to create an electricity pricing system that was transparent, efficient and fair to consumers while supporting vulnerable households and protecting productive industries.
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