South Africa proposes major electricity pricing policy overhaul

South Africa’s Minister of Electricity, Kgosientsho Ramokgopa, has unveiled a proposed Revised Electricity Pricing Policy aimed at increasing transparency and efficiency in the energy sector. The policy, which has been approved for public comment, seeks to implement cost-reflective tariffs and prevent the practice of passing the costs of non-payment and illegal connections onto diligent consumers.

Currently, a portion of electricity tariffs is used to recover municipal and Eskom debt caused by defaults. The new framework proposes that these costs should not be passed through higher tariffs to paying customers, but instead should trigger actions against those who fail to pay or use illegal connections.

Representing the most significant overhaul in nearly two decades, the reforms also aim to provide commercial and industrial customers with greater cost certainty. Proposed measures include a 10-year electricity price forecast and the expansion of negotiated pricing agreements. Additionally, the policy would allow customers to purchase electricity from alternative suppliers while paying transparent, non-discriminatory network fees to Eskom or municipalities.