South Africa is set to undergo significant changes to it’s electricity pricing structure, with revised policies aiming to redefine the concept of ‘free’ electricity. These changes are expected to significantly impact the country’s energy landscape which will encourage a review of electricity consumption patterns and foster a more sustainable approach to power usage.
Electricity Services
The National Energy Regulator (Nersa) has approved the National Free Basic Electricity (NFBE) rate for 2024, which will be set at 194.40c/kWh for the 2024/25 municipal financial year. The rate ensures eligible households have access to essential electricity services like basic lighting, media access, water heating, and ironing. Nersa is preparing alongside government departments to assess the 50kWh units per month and consider adjustments based on economic conditions since it’s 2003 implementation.
The Free Basic Electricity (FBE) program is funded by the National Treasury to local authorities through equitable share allocation, determined by the Department of Cooperative Governance and Traditional Affairs (CoGTA). This funding is distributed fairly to supplement internal revenues and provide basic services to impoverished households. Permit holders are required to charge customers only tariffs approved by the Energy Regulator under section 15(2) of the Electricity Regulation Act.
Way Forward To Brighter Days
Free basic electricity is intended to cover essential electricity services for qualifying households, including lighting, media access, water heating, and ironing. The funding for this program is allocated by the National Treasury to local authorities through equitable share distribution. Permit holders are required to charge customers only the approved tariffs, as determined by the Energy Regulator. The NFBE rate is adjusted annually using an approved methodology. Nersa is currently engaging with relevant government departments to review the 50kWh units per month and consider adjustments based on economic conditions.
