Parliament, Wednesday, 23 September 2026 – The Portfolio Committee on Electricity and Energy welcomed the presentation it received yesterday from the Department of Electricity and Energy on the draft energy pricing policy (EPP), but said the presentation was long overdue.
Committee members said the test of a new policy will not be how elegant it looks on paper, but rather what it means for the monthly bill of the ordinary household.
Members of the committee observed that the policy says a great deal about the tariff, but considerably less about what an ordinary household will actually pay, as the policy changes not just the level of tariffs, but the structure of the bill. Consumers could face separate energy, capacity, transmission, distribution and other service charges, as well as subsidies, legacy costs and municipal charges.
The department said in its presentation that the EPP provides the national policy framework governing electricity tariff setting in South Africa. It establishes the principles, structures and rules that guide the electricity pricing determinations made by the National Energy Regulator of South Africa (NERSA), Eskom, municipalities and other licenced electricity providers.
The committee heard that the current electricity pricing policy (2008) was developed for a fully regulated electricity sector. Ongoing electricity sector transformations, including the introduction of market-based mechanisms and increased competition, necessitate a revised policy framework that is aligned with the evolving electricity market.
The department said the EPP establishes national principles and tariff path certainty; provides a framework for transparent, efficient and cost-reflective tariffs; guides NERSA, Eskom and municipalities; aligns pricing with a competitive market; and strengthens social protection and accountability.
The revised policy also introduces stronger monitoring, compliance and verification measures to ensure that pricing principles are applied consistently and that accountability and implementation are improved. Previously, limited monitoring and confirmation mechanisms led to gaps in applying core policy requirements.
Tariffs are to be set at a level that would not only ensure that the utility generates sufficient revenues to cover full costs (including a reasonable margin or return), but would also allow the utility to obtain reasonably priced funding on a forward-looking basis.
Bills will be unbundled to indicate energy costs, network charges, ancillary services and municipal surcharges, so that consumers understand what they are paying for. This will make it easier to dispute inaccurate charges and prevent hidden fees and disguised cross-subsidies. Free basic electricity will feature improved targeting, stronger indigent identification and better municipal administration, along with improved tariff alignment integrated with cost-reflective, unbundled pricing to balance social support with sector financial viability.
Members of the committee noted that they had requested a simple electricity pricing model and policy. This is because people want to know: am I going to pay R3 or R3.50 maximum at retail level for prepaid for my house, my business, my workshop, my warehouse, my farm or my village house?
Members were concerned that the proposed policy relates to an electricity regulatory model that does not address bringing down prices or capping the cost of electricity at the consumer level. Instead, the focus is on how to create a policy for electricity sector market transformation. The committee reiterated that electricity prices are unaffordable for regular South Africans.
The policy proposes a cost-reflective electricity tariff, which means that what people are paying a maximum of R5 for today will increase to R10 in the next three months, committee members said.
Committee members also observed that when the electricity market and the electricity economy in South Africa were created and Eskom was established, the original Act stated that electricity should be affordable and subsidised to ensure it is not a commodity for trading, but a utility for industrialisation.
Now we are treating it as a trading commodity, they said, and moving away from the objectives of industrialisation and the provision of cheaper, more cost-effective electricity, using electricity as a throttle for economic development rather than an enabler.
The committee asked when the department will draft a basic pricing model for the electricity sector market transformation policy. It also wanted to know the final retail price of electricity for all municipalities selling prepaid or post-paid electricity and what it would cost users. The department replied saying that the policy does not provide a path to determine a specific price.
Meanwhile, the committee commended the department for ensuring that the free basic electricity grant is front and centre, and working to increase it, thereby making it more impactful.
Addressing double charges, members questioned whether the new electricity pricing formula deals with double charges originating from municipalities. The department stated that the new electricity pricing policy will allow the regulator to introduce standardised charges across all municipalities to address issues that have occurred in the past.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON ELECTRICITY AND ENERGY, MS ZAMA KHANYASE.
For media inquiries or interviews with the Chairperson, please contact the committee’s Media Officer:
Name: Yoliswa Landu (Ms)
Cell: 081 4974694
E-mail: ylandu@parliament.gov.za
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