Inquiry Initiated Amidst Public Outcry
The National Energy Regulator of South Africa (NERSA) has officially launched a comprehensive market inquiry into the implementation and impact of fixed and capacity charges within the country's electricity sector. This move comes in response to significant concerns raised by customers and stakeholders regarding the substantial increases in electricity bills, which have often exceeded the officially approved tariff hikes.
NERSA, established under the National Energy Regulator Act of 2004, is mandated to regulate South Africa's electricity, piped gas, and petroleum pipelines industries, including setting and approving tariffs.
Focus Areas and Legal Basis
The inquiry will primarily scrutinize municipal fixed charges and Eskom's unbundled generation tariffs. These tariffs comprise the generation capacity charge (GCC), legacy charges, and variable energy charges. The regulator aims to uncover how distributors formulated these charges, which have contributed to significantly higher costs on top of the approved 12.74% tariff increase for Eskom.
Undertaken in terms of section 4(b)(ii) of the Electricity Regulation Act, 2006, read with sections 2(b) and 4(a)(viii), the investigation seeks to enhance transparency, foster regulatory certainty, and ensure that tariff structures remain equitable and economically sustainable. Nomfundo Maseti, a full-time regulator member responsible for electricity regulation at NERSA, underscored the regulator's commitment 'to safeguarding the interests of electricity consumers.'
Timeline for Public Participation and Reporting
The inquiry process will involve a multi-faceted approach, including requests for documents, data analysis, benchmarking, stakeholder submissions, and public hearings. Stakeholders, including residential, commercial, and industrial customers, municipalities, and Eskom, are invited to contribute evidence.
- Publication of Terms of Reference: September 26, 2025
- Deadline for Written Submissions: October 25, 2025
- Public Hearing: November 17, 2025
- Draft Market Inquiry Report: December 2025
- Final Report Publication: Early 2026
Charles Hlebela, NERSA's Head of Communications, stated that the inquiry 'responds to widespread concerns from customers and stakeholders about the impact of these charges, as well as the level of increase imposed, and the structure and justification of these charges.'
Impact of Recent Tariff Changes
The market inquiry follows NERSA's approval in April 2025 of Eskom's retail tariff plan, which marked a significant shift in electricity pricing principles. This plan transitioned the billing model from predominantly usage-based to one where fixed charges predominate. While Eskom's direct customers saw a 12.74% increase and municipalities an 11.32% rise, many consumers experienced much higher overall bill increases due to these additional fixed and capacity charges.
This structural change has had a disproportionate impact, with low-usage customers, such as retirees and those with solar installations, reportedly facing increases of 20% to 40%. Conversely, high-usage households have benefited from lower per-unit costs.
5 Comments
Mariposa
My bills are already unaffordable. This investigation is a joke while we continue to suffer.
Muchacha
It's positive to see NERSA responding to public outcry, as these bill increases have been devastating for many. However, they also need to explain how these disproportionate charges were initially approved under their watch, raising questions about past oversight.
Donatello
Too little, too late. NERSA should have acted sooner to prevent this mess.
Comandante
Protecting consumers from unfair pricing is their job, and they're finally doing it right.
Raphael
Transparency in electricity billing is absolutely vital. This investigation is a positive step.