Investigation into electricity prices launched

The National Energy Regulator of South Africa (Nersa) has launched an investigation into the fixed charges levied by electricity distributors, including Eskom and municipalities.

This comes amid growing concerns over high electricity prices and the increases being added to the approved 12.74% tariff increase for Eskom.

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The energy regulator has embarked on a ‘focused market inquiry into the implementation and impact of fixed charges, a generation capacity charge (GCC), legacy charges and other associated charges levied by distributors’.

The inquiry is set to reveal ‘how the distributors formulated the charges, which resulted in substantially high increases being added to the approved 12.74% tariff increase for Eskom, as well as assess the impact of these charges on different customer segments, and evaluate their alignment with approved tariff methodologies’.

It aims to respond 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’.

“This inquiry underscores Nersa’s commitment to safeguarding the interests of electricity users while ensuring the financial viability of the sector.

The inquiry will focus primarily on municipal fixed charges and Eskom’s unbundled generation tariffs, comprising the generation capacity charge, legacy charge, and variable energy charge.

“By engaging stakeholders and rigorously interrogating the basis of these charges, we aim to deliver regulatory guidance that promotes fairness, cost-reflectivity, and stability in the electricity market,” said Nomfundo Maseti, Nersa’s full-time regulator member responsible for electricity regulation.

“Nersa invites all affected parties, including residential, commercial and industrial customers, municipalities and Eskom, as well as industry associations, to contribute evidence on how these charges have influenced costs, consumption behaviour and service delivery.”

Submissions and queries should be sent to electricity.marketinquiry@nersa.org.za before the 25 October deadline.

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