# summary

- Link: https://dearsouthafrica.co.za/electricity-pricing-policy/summary/
- Published: 2026-09-24T12:23:27+02:00
- Author: dearSA

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### _Executive Summary & Policy Blueprint_

The Department of Electricity and Energy (DEE) has officially published the Revised
Electricity Pricing Policy (EPP 2026) under Government Gazette No. 55257 (Notice
7852), replacing the outdated 2008 framework. In a crucial procedural development,
Minister Dr Kgosientsho Ramokgopa gazetted Government Notice No. 7948 (Gazette No.
55436) on 22 September 2026, formally extending the statutory public comment period
to Wednesday, 28 October 2026.

The revised policy operationalises the tariff architecture required by the Electricity
Regulation Amendment Act, 2024 (ERAA), moving South Africa from a vertically integrated
monopoly pricing regime to an unbundled, multi-market environment. The document 
sets out 54 specific Policy Positions spanning generation, wholesale, transmission,
distribution, and retail.

### _Key Policy Pillars & Structural Mechanisms_

[5-Year Mandatory Cost-Reflectivity Transition (Policy Positions 2, 24, 30)](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1738150189952-44103674-e29d31d9-c3be5520-25438db3-94f9)

All generation, transmission, distribution, and retail tariffs must become fully
cost-reflective within five years. Licensees must submit Cost of Supply (CoS) and
Cost to Serve (CTS) studies to NERSA at least every five years based on standardised
regulatory accounts.

[Universal Tariff Unbundling (Policy Positions 2, 3, 27)](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1738150189975-5d0623dc-47dc31d9-c3be5520-25438db3-94f9)

Blended, single-rate tariffs are scrapped. Invoices must transparently itemise wholesale
energy purchases (variable energy + generation capacity + balancing), transmission
network charges, distribution use-of-system (DUoS), customer service charges (R/
point of delivery/month), administrative fees, municipal surcharges, and explicit
subsidy contributions.

[Fixed Network Charges & Standby Capacity Fees (Policy Positions 11, 15, 27, 30)](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1738150854013-bb98f5fb-7d0931d9-c3be5520-25438db3-94f9)

To eliminate volume risk for distributors and prevent “free-riding,” fixed infrastructure
costs will no longer be recovered through variable kilowatt-hour ($c/kWh$) charges.
Utilities must introduce separate fixed capacity charges ($R/kVA$, $R/kW$, or $R/
Amp/month$). Additionally, a wholesale generation standby capacity charge ($R/kW
$) will be levied across all customer classes to fund backup generation reserves.

[Strict Rules for Prosumers & Rooftop Solar (Policy Position 33)](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1738151172108-10076802-4d0031d9-c3be5520-25438db3-94f9)

Grid-tied consumers with embedded generation (rooftop solar) face a stringent net-
billing structure:

 1.  a. Mandatory Time-of-Use (TOU) tariffs.
     b. Prosumers must pay standard DUoS and TUoS network charges on both consumed electricity
        and exported energy.
     c. Exported energy will be credited at “avoided purchase cost” on a TOU basis, but
        network, transmission, and retail charges cannot be offset or credited against
        energy exports.
     d. Extra retail administration fees will be billed to handle net-billing accounts.

[Restructuring Domestic Tariffs & Scrapping Standard IBR (Policy Position 38)](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1790245042943-7eeab307-1389)

Inclining Block Rate (IBR) tariffs are eliminated for standard residential consumers.
Domestic supply is divided into:

 1.  a. _Lifeline Tariffs:_ Single energy rate with zero fixed charge, limited to 60 Amps
        for indigent households.
     b. _Standard Domestic:_ Unbundled charges featuring an itemised monthly network capacity
        charge, customer service charge, and energy rate.
     c. _Three-Phase Domestic:_ Mandatory TOU energy rates and capacity charges.

[50/50 Transmission Cost Allocation (Policy Position 19)](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1790245211037-1f19070d-0847)

Transmission network costs will no longer be recovered solely from load customers.
Costs will be split 50/50 between generators and consumers using a zonal pricing
methodology, preventing local consumers from subsidising cross-border electricity
exports under Southern African Power Pool (SAPP) trading.

[Municipal Surcharge on Electricity (MSOE) Reform (Policy Position 47)](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1790245238312-3072eb17-59a6)

Unregulated, hidden municipal electricity “surpluses” used to fund municipal budgets
are prohibited. Base electricity tariffs will be strictly regulated by NERSA to 
cost of supply. Any municipal surcharge must be transparent, itemised, and regulated
by National Treasury under the Municipal Fiscal Powers and Functions Act. No new
MSOE can be introduced alongside existing hidden surpluses.

[Consumer Shield Against Inefficiencies & Bad Debts (Policy Positions 42, 43)](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1790245286655-ebe41fd9-f37a)

NERSA must establish empirical benchmarks for technical losses, non-technical losses(
theft), and bad debt. Any municipal or Eskom losses and uncollected debts exceeding
these regulatory thresholds must be excised from the allowed revenue base and cannot
be passed on to paying consumers.

[Regulating Prepaid Electricity Vendors (Policy Position 45)](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1790245315305-daaa60e6-79d2)

NERSA is mandated to establish a binding pricing framework within 12 months capping
service fees and commissions charged by third-party prepaid vending platforms to
protect consumers from excessive markups.

[Subsidies, FBE Expansion & NPAs (Policy Positions 50–54)](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1790245346965-1c91e42c-e118)

Cross-subsidies must be transparent and capped (e.g., maximum 10% contribution threshold).
While the policy formalises Free Basic Electricity (FBE) funded via the national
budget/equitable share, Minister Ramokgopa’s push to lift FBE from 50 kWh to 200–
300 kWh per month raises critical tariff questions. Negotiated Pricing Agreements(
NPAs) offering discounted industrial rates (such as 62 c/kWh for ferrochrome smelters)
will be expanded beyond distressed entities to strategic growth sectors, with shortfalls
strictly managed to avoid distorting general tariffs.

### _Questions and answers_

[How will the shift to "unbundled" tariffs change my monthly electricity bill?](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1763554389233-fdb8fee6-6da45520-25438db3-94f9)

Currently, most residential consumers pay a single, blended rate per kilowatt-hour_(
c/kWh)_ that rolls generation, transmission, local cables, and municipal administration
into one charge. Under EPP 2026, your bill will be separated into explicit line 
items: actual energy consumed, a fixed monthly capacity charge for the wires _(R/
kVA or R/Amp)_, a customer service and meter reading fee, an itemised municipal 
surcharge, and an explicit subsidy line item.

[I installed rooftop solar to beat load shedding. What does this policy mean for me?](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1763554389265-aa09206a-77665520-25438db3-94f9)

The policy explicitly targets solar owners under Policy Position 33. Because you
draw less energy from the grid while still relying on it at night, utilities lose
volumetric revenue. EPP 2026 introduces mandatory fixed monthly capacity charges
that you must pay regardless of how little power you pull. If you export power back
to the grid, you will receive a credit at “avoided cost,” but you will also be charged
network fees on your exported electricity, and your export credits cannot be used
to offset your fixed monthly charges.

[ill the expansion of Free Basic Electricity (FBE) increase my tariff?](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1763554389298-fbc55a3c-817c5520-25438db3-94f9)

The draft policy states that FBE must be funded through government equitable share
allocations and the national budget. However, the Minister announced plans to raise
the allocation from 50 kWh to between 200 kWh and 300 kWh per month without increasing
the national R21 billion funding envelope. Energy experts caution that if National
Treasury does not bridge this multibillion-rand gap, utilities will recover the 
deficit by raising tariffs on paying domestic and business consumers.

[Can municipalities continue using electricity markups to balance their budgets?](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1771840733358-e4b2d08e-b2268db3-94f9)

**No**. Policy Position 47 outlaws the practice of using hidden, non-transparent
electricity surpluses to fund other municipal operations. Base electricity tariffs
must strictly reflect the cost of supply approved by NERSA. Any municipal surcharge(
MSOE) must be transparent, itemised on the bill, and approved under National Treasury
regulations.

[Are consumers still forced to pay for Eskom’s and municipalities' uncollected debt and stolen power?](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1771840767171-e194ee95-bf828db3-94f9)

Policy Positions 42 and 43 introduce an essential ratepayer protection: NERSA must
establish binding benchmarks for non-technical losses (electricity theft/illegal
connections) and bad debt. Any losses or unpaid debt exceeding these limits cannot
be factored into allowable revenue or passed on to consumers through tariff hikes.

[What is being done about excessive fees charged when buying prepaid electricity?](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/#1790245659752-b6673f9b-acfb)

Policy Position 45 instructs NERSA to develop a national standardised pricing framework
for prepaid electricity vendors within 12 months, setting maximum allowable service
fees and commissions to eliminate predatory markups.

The Revised Electricity Pricing Policy

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The Government notice

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### _In the News_

    - IOL — [Electricity policy may reshape, not reduce, household power bills](https://iol.co.za/news/south-africa/kwazulu-natal/2026-09-24-electricity-policy-may-reshape-not-reduce-household-power-bills/)
    - Green Building Africa — [South Africans invited to comment on revised electricity policy](https://www.greenbuildingafrica.co.za/south-africans-invited-to-comment-on-revised-electricity-pricing-policy/)
    - SA News — [Have your say on Draft Revised Electricity Pricing Policy](https://www.sanews.gov.za/south-africa/have-your-say-draft-revised-electricity-pricing-policy)
    - Sowetan — [Reforming electricity pricing to build a fairer and more sustainable energy future](https://www.sowetan.co.za/opinion/columnists/2026-09-20-makhosonke-buthelezi-reforming-electricity-pricing-to-build-a-fairer-and-more-sustainable-energy-future/)
    - BusinessTech — [New electricity price overhaul for South Africa officially published](https://businesstech.co.za/news/energy/872639/new-electricity-price-overhaul-for-south-africa-officially-published/)
    - Engineering News — [Draft electricity pricing policy outlines support for industry, poor households](https://www.engineeringnews.co.za/article/draft-electricity-pricing-policy-outlines-support-for-industry-poor-households-2026-08-18)

**MyNorthernCape TV.** On Tuesday, 18 August 2026 Minister of Electricity & Energy
Dr. Kgosientsho Ramakgopa Briefed The Media On Revised Electricity Pricing Policy.

**SABC News.** Electricity and Energy Minister, Dr Kgosientsho Ramokgopa says the
high cost of electricity is undermining the competitiveness of industries and eroding
the disposable income of households. Ramokgopa says he is convinced that the revised
electricity pricing policy will help address the hidden costs associated with electricity
prices and reduce the burden on consumers.

**SABC News.** Prof Vally Padayachee weighs in on the newly unveiled electricity
pricing policy

**SABC News.** Minister of Electricity and Energy Dr Kgosientsho Ramakgopa is briefing
the media in Pretoria on the country’s revised electricity pricing policy. Let’s
take you there live.

### _Statements and media releases_

Click on a logo to view.

Want to display your organisation’s statement? [Click here. ](https://dearsouthafrica.co.za/electricity-pricing-policy/summary/ epp2026@dearsouthafrica.co.za?subject=org info for EPP 2026 info page)

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### Cape Independence Party

 **CAPEXIT Party strongly opposes the Business Licensing Bill in its entirety on
all points:**

**Preferential licensing**
 The Bill explicitly empowers the Minister to grant licences
on a “preferential” basis and to impose conditions that advance “historically disadvantaged
individuals” or other designated groups. This is nothing less than state-sanctioned
racial and ideological discrimination dressed up as transformation policy.

CAPEXIT rejects the notion that the state has any legitimate role in deciding which
racial or social group may or may not operate a business. Such preferential licensing
will:

    - Reintroduce apartheid-era economic controls under a new ideological banner;
    - Create a cronyist system where access to markets is determined by political
      connections and demographic criteria rather than merit, innovation or consumer
      demand;
    - Discourage both domestic and foreign investment, as investors will rightly
      fear that their businesses can be denied licences or subjected to arbitrary
      conditions on racial or political grounds.

No free society licenses businesses on the basis of the owner’s skin colour or historical
narrative. This clause alone renders the entire Bill unconstitutional and morally
indefensible.

**Principles of business licensing**
 The Bill fails to articulate any coherent,
objective, or proportionate principle for requiring a general business licence in
the first place. Instead, it presumes that every enterprise – from a street vendor
to a multinational corporation – must seek prior permission from the state simply
to exist and trade.

This reverses the fundamental principle of a free economy: citizens should be free
to engage in lawful economic activity without state permission unless there is a
clear, evidence-based justification (e.g. public health, safety or environmental
protection).

The Bill provides no such justification. It is a blanket assault on economic freedom,
reminiscent of the licence-permit raj that crippled India’s economy for decades.
Requiring a general “business licence” in addition to existing sector-specific permits(
liquor, health, zoning, etc.) serves no legitimate public purpose – only the purpose
of expanding state control and creating new opportunities for rent-seeking and corruption.

**Powers of inspectors**
 The Bill grants inspectors extraordinarily broad and invasive
powers, including warrantless entry into private premises, seizure of documents 
and goods, and the ability to close businesses on the spot. These powers are ripe
for abuse and will be weaponised against political opponents, non-compliant businesses,
and any entrepreneur who refuses to pay bribes.

In a country already plagued by corruption scandals, handing unelected officials
the power to enter and shut down businesses without judicial oversight is an open
invitation to extortion. Small businesses, spaza shops, and informal traders – many
of them immigrant-owned – will be particularly vulnerable to harassment and shakedowns.
Far from promoting transformation, this will simply create a new class of “licence
inspectors” who enrich themselves at the expense of the poor.

**More red tape**
 South Africa already ranks poorly on the World Bank’s Ease of
Doing Business index, largely because of regulatory overreach. This Bill adds yet
another layer of costly, time-consuming bureaucracy on top of SARS registration,
municipal permits, B-BBEE compliance, UIF, COIDA, sector SETA requirements, and 
dozens of other licences.

The compliance costs – application fees, mandatory consultations, endless paperwork,
and the risk of arbitrary refusal – will crush startups and force thousands of small
businesses to close or remain informal. Jobs will be lost, investment will flee,
and the tax base will shrink. The Western Cape, which has consistently outperformed
the rest of South Africa precisely because of lighter and more efficient regulation,
will see its competitive advantage deliberately sabotaged by Pretoria.

**Conclusion**
 The Business Licensing Bill is not reform – it is economic sabotage.
It centralises power in the hands of an already overreaching and underperforming
national government, reintroduces racial criteria into commerce, and erects new 
barriers to entrepreneurship at a time when South Africa desperately needs growth
and jobs.

CAPEXIT calls for the complete withdrawal of this Bill. The people of the Western
Cape, and indeed all South Africans who believe in freedom, will not accept a return
to a permit-based economy controlled by bureaucrats and political gatekeepers.

For a free, prosperous, and non-racial future, this Bill must be rejected in its
entirety.