Big changes planned for electricity pricing in South Africa
Minister of Energy and Electricity Kgosientsho Ramokgopa has emphasised that the department, in collaboration with the South African Local Government Association (SALGA) and municipalities, is dedicated to finding a lasting solution to the increasing cost of electricity in South Africa.
The Minister spoke at a media briefing on Monday morning (29 July) about the significant increase in electricity costs.
He said the ministry is currently focused on implementing the electricity pricing plan in collaboration with Eskom, municipalities, and SALGA.
Ramokgopa highlighted some initiatives by municipalities that have not been well received by communities, such as the introduction of a “surcharge” (also known as a network fee).
He emphasised that rather than publicly debating the necessity of the surcharge, the focus should be on finding a more sustainable solution to the issue.
The Minister mentioned that talks with SALGA had already started during the sixth administration.
He highlighted the importance of working together, acknowledging the situation as unsustainable.
Communities are becoming increasingly upset and people are struggling to afford the cost of electricity.
The Minister, along with the Deputy Minister, has decided not to stand idly by despite the fact that this falls under the exclusive responsibility of local authorities.
While municipalities rightfully claim it as their responsibility, Ramokgopa said an agreement has been reached with SALGA to address this issue internally.
Ramokgopa stressed the importance of the National Energy Regulator of South Africa (Nersa) in finding solutions.
He stated that as an independent authority, Nersa is responsible for protecting consumers and examining proposed tariff increases from Eskom and municipalities.
Ramokgopa expressed the intention to collaborate with Nersa rather than exert pressure on them.
He emphasised the need for a Nersa framework that considers the interests of the poor and the marginalised, ensuring their access to electricity.
Additionally, he highlighted the importance of protecting the interests of the affluent and ensuring that the pricing structure remains affordable over time.
Ramokgopa also emphasised the need to safeguard industries from becoming uncompetitive due to the pricing structure.
He expressed a commitment to working with municipalities to address their challenges and resolve the issue of rampant electricity prices.
The current electricity pricing regime ties prices to Eskom’s costs, resulting in decades of mismanagement and crisis spending being passed on to consumers.
Eskom’s tariff increases have significantly outstripped inflation since load-shedding began in 2008, with the tariff increasing by 653% over the last 15 years while inflation increased by only 129% over the same period.
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