South Africans may end up paying more for electricity even when they use less power. This is the warning from the Organisation Undoing Tax Abuse (OUTA) about the government's proposed revised electricity pricing policy.
OUTA raised concerns on Friday, 30 October that the policy could lead to significantly higher fixed monthly charges. Households may have to pay more simply because they are connected to the electricity network, regardless of how much power they use.
The organisation submitted its objections to the Department of Electricity and Energy as part of the public consultation process on the proposed policy.
What does this mean for your power bill?
Electricity bills consist of different costs. Some charges relate to the amount of electricity consumed, while others are fixed amounts that must be paid regardless of consumption.
OUTA is concerned that the new policy could enable electricity suppliers to recover a larger portion of their income through fixed charges. This could particularly affect households that deliberately use less electricity to save money.
Wayne Duvenage, OUTA's chief executive officer, argues that the proposed policy places too much emphasis on protecting Eskom and other electricity suppliers' income, rather than on affordable power for consumers.
OUTA is not opposed to all fixed charges, but warns that large increases should not be implemented without a thorough investigation into the financial impact on households and small businesses.
Concerns also for households with solar power
The organisation also warns that the proposed policy could disadvantage people who have invested in solar power systems.
Changes to fixed charges, time-based tariffs and compensation for electricity fed back to the network could reduce the financial benefits of solar power.
OUTA believes households should be encouraged to use alternative energy sources rather than being discouraged by additional costs.
What does the government say?
The Department of Electricity and Energy published the revised electricity pricing policy in August for public comment.
The government wants to update the existing policy from 2008 and establish a more transparent tariff system that reflects the actual cost of electricity provision.
Vulnerable and low-income households are protected by the proposed policy through, among other measures, free basic electricity and special tariff arrangements.
The period for public comment was extended to 28 October. The department must now consider the submissions before the policy is finalised.
Have the new charges already been approved?
No. The proposed electricity pricing policy is not yet a final tariff decision. It sets out the principles according to which future electricity tariffs and charges can be developed and regulated.
The warning about higher fixed charges must also be distinguished from Eskom's ordinary annual tariff increases.
Nersa previously confirmed that Eskom's average tariff increase for the 2026/27 financial year amounts to 8,76%, while an increase of 8,83% for 2027/28 is estimated, subject to appropriate adjustments.
OUTA calls for the proposed policy to be revised to better protect consumers' interests, affordability and greater competition in the electricity market.
Sources: Organisation Undoing Tax Abuse (OUTA), Department of Electricity and Energy, National Energy Regulator of South Africa (Nersa).
This article is an automatic English translation of a Nuusflits article originally published in Afrikaans. Read the Afrikaans original.
