Ramokgopa unveils pricing policy to make electricity bills more transparent

Electricity and Energy Minister Kgosientsho Ramokgopa has unveiled a revised electricity pricing policy intended to give consumers clearer bills and to tackle hidden charges arising from inefficiencies, municipal debt and non-payment.

Unbundled bills to show what consumers pay for

Ramokgopa said the revised policy would introduce a more transparent and cost-reflective tariff structure and require electricity bills to clearly show how charges are calculated. Under the proposed system, bills would be unbundled to itemise components including energy and generation costs, transmission and distribution network charges, ancillary services and municipal surcharges.

“What we’re also doing with the pricing policies is to provide a framework for transparent and efficient cost-reflective tariffs,”

The minister said the changes would let consumers see how costs accumulate before reaching their final bill and would require bills to itemise how the municipality or Eskom has arrived at amounts claimed.

“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,”

Preventing compliant consumers from carrying others’ debt

Ramokgopa criticised the practice of shifting the cost of non-payment and municipal debt onto consumers who pay their accounts. He said the current tariff structure allows Eskom to recover some municipal debt through tariffs, effectively adding pressure on compliant households.

According to the minister, between 1 and 2.5 percentage points of the current tariff can be attributed to Eskom being unable to recover money owed through municipalities. The revised policy is intended to prevent those costs from being shifted to paying consumers.

“You are not allowed to punish those who are paying on account of those who are not paying,”

Social protection and free basic electricity

The policy would also strengthen social protection measures by modernising how free basic electricity is administered. Government plans to integrate electricity beneficiary information with Home Affairs and social grant databases to identify households that qualify.

Ramokgopa said the system would include automated annual verification so households’ eligibility could be reassessed as circumstances change, and that qualifying for a social grant made it likely a household would also qualify for free basic electricity.

“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,”

Load reduction and industry support

The revised policy comes as government reports progress on load shedding and load reduction. Ramokgopa said the country had effectively turned a corner on load shedding and expressed confidence in maintaining momentum.

He announced that load reduction had been eliminated in seven of the country’s nine provinces, with the Eastern Cape becoming the seventh province to reach that milestone. Gauteng and KwaZulu-Natal remain the two provinces where load reduction is still being addressed.

The minister said government would return to the public with further details on preventing load reduction from returning.

The policy will also allow for negotiated electricity pricing agreements to protect strategically important, energy-intensive industries from closure and job losses. Ramokgopa said government was engaging with major industrial electricity users and had publicly discussed concessions with Samancor and Glencore, with around seven other players being considered for concessional tariffs.

Scope and implementation

Ramokgopa said the revised pricing 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, extending beyond the traditional Eskom-and-municipality model to include independent generators, traders and bilateral supply agreements.

The minister described the overarching objective as creating an electricity pricing system that is transparent, efficient and fair to consumers while supporting vulnerable households and protecting productive industries.