Kgosientsho Ramokgopa, the Minister of Electricity and Energy, has published the Revised Electricity Pricing Policy for public comment.
South Africa’s new Electricity Pricing Policy aims to introduce mechanisms to prevent prepaid consumers from paying excessive vending fees when buying electricity.
Electricity minister Kgosientsho Ramokgopa published South Africa’s Revised Electricity Pricing Policy for public comment on Friday, 28 August 2026.
Ramokgopa previously said that the policy would introduce changes to make electricity more affordable and prices more transparent for consumers.
The policy seeks to establish a tariff path that will provide some certainty on the cost of electricity over the next 10 years.
The new policy, if approved as-is, tasks the National Energy Regulator of South Africa (NERSA) with implementing a standardised pricing framework for electricity vending services.
The regulator must get this done within 12 months of the Revised Electricity Pricing Policy being implemented.
“This framework will define allowable service fees and commission structures to prevent vendors from charging excessive margins,” it stated.
The policy stipulates that NERSA must address and remove all unauthorised forms of discriminatory pricing practices within 12 months of the policy taking effect.
“These discriminatory practices have created a situation where similar customers are subject to significantly different tariffs without any real differences in the cost of supply,” the policy read.
“This undermines the efficient allocation of resources and prevents healthy competition within similar industries.”
Under the Revised Electricity Pricing Policy, power producers like Eskom won’t be guaranteed revenue recovery if their demand and supply-side operations aren’t efficient.
“Revenue recovery is not guaranteed, and utilities must seek efficiencies during their licensed activities,” the revised policy said.
“Tariffs should promote overall demand- and supply-side economic efficiency and be structured to encourage sustainable, efficient, and effective use of electricity.”
It added that efficiency would be incentivised by setting tariffs based on the efficient use of assets, assessing used capacity against available capacity.
The revised policy proposed excluding inefficiencies from the revenue base to protect consumers from paying for technical losses, non-technical losses, bad debts, and other inefficiencies.
“The component of technical, non-technical losses, and bad debt that exceeds the approved standard must be considered unacceptable and be removed from the approved revenue base,” the policy stated.
It also proposed regulating Municipal Surcharges on Electricity, as many municipalities historically hid surpluses and overstated charges in electricity departments to subsidise other services.
“Currently, a significant amount of electricity revenue is used by many municipalities to subsidise other municipal services,” the revised policy said.
“This is done by way of a transparent so-called ‘surplus’, but also by way of various non-transparent methods.”
It added that these included the provision of streetlights, overstated administrative charges, unfair surcharges on materials handling, and understated internal usage charges.
Municipal Surcharges on Electricity (MSOEs) will be regulated through norms and standards for electricity surcharges as and when they are introduced.
“When regulations on electricity surcharges are introduced, the regulation of the base tariff will be the responsibility of the National Energy Regulator of South Africa (NERSA),” the policy continued.
The Minister of Finance and the National Treasury will be responsible for regulating municipal surcharges.
“Under no circumstances shall the new MSOE be introduced in addition to the current non-transparent, non-ring-fenced surpluses as identified in regulatory accounts,” it said.
A core part of the revised pricing policy related to the unbundling of Eskom and bolstering competition in the electricity market.
The structural shift aimed to establish cost-reflective and efficient electricity pricing throughout the electricity supply value chain.
“The electricity supply industry is undergoing a structural transformation, transitioning from a vertically integrated, monopoly-based system to an unbundled and competitive electricity market,” it said.
Interested persons and organisations have 30 days to submit written comments on the Revised Electricity Pricing Policy.
