“With COP31 now underway in Turkey, these discussions provide a valuable opportunity to examine how the global transition to cleaner energy could also deliver affordable and reliable electricity to ordinary people. For South Africa, this means energy choices that protect households from rising electricity costs, while championing energy sources that do not harm people or the environment, and does not threaten local livelihoods. Furthermore, it is important that electricity pricing policy puts households and the public interest first. This includes increasing the Free Basic Electricity (FBE) allocation from 50 kWh to 350 kWh per month, to better support indigent and vulnerable households,” says Neville van Rooy, The Green Connection’s Outreach Ambassador.
In its recent submission to the Department of Electricity and Energy, The Green Connection – an eco-justice organisation that works with coastal communities and small-scale fishers – calls for an urgent overhaul of South Africa’s Electricity Pricing Policy (EPP). The organisation says that this policy should promote transparency and stronger consumer protection, as well as cost-reflective tariffs and electricity-market reforms that do not lock the country into costly fossil-fuel generation.
“Electricity is an essential service, not a luxury. Millions of households are being denied support they qualify for, while consumers face rising costs and complex tariffs. The revised policy must ensure that everyone can access affordable electricity. Moreover, it is a major concern that of the 10 million FBE-eligible households, a massive 8 million vulnerable homes are missing out on this very critical support – which is already very low, at 50 kWh per household per month,” adds van Rooy.
Affordability must be at the heart of electricity reform
The Green Connection further argues that security of supply must mean more than electricity being available in the system but also that it is affordable enough for people to use. The organisation says electricity pricing must support economic development while upholding constitutional rights, including the right to dignity and equality and the right to an environment that is not harmful to health or wellbeing.
“The calculation of electricity tariffs must be transparent and cost-reflective and should only pass on legitimate, necessary and efficiently incurred costs to consumers. All charges, including capacity and legacy charges, must be clearly explained and unbundled to prevent double charging. Where generators pay capacity or backup charges, these costs should form part of their cost of supply, allowing customers to compare electricity offerings fairly. Access without affordability is not just. A pricing policy that leaves vulnerable households behind cannot claim to serve the public interest,” says Lisa Makaula, The Green Connection’s Advocacy Lead.
Legacy charges must not prolong fossil fuel dependence
The Green Connection warns that capacity and legacy charges must not become a mechanism for extending the economic life of fossil-fuel generation beyond what is reasonably necessary to maintain electricity reliability during the just transition. This means moving away from an economy that relies heavily on fossil fuels – which emits greenhouse gases that lead to global warming, such as oil, gas and coal – towards a net-zero economy by 2050, in an effort to reduce the impacts of climate change. Legacy charges should recover only unavoidable transition costs and be phased out over the shortest practical and economically efficient period. They must not subsidise continued fossil-fuel generation or recover costs associated with imprudently new capacity that has arguably been procured unwisely.
“Households should not be expected to carry the cost of keeping an outdated energy system alive. Legacy charges must be justified, transparent and temporary. They cannot become a subsidy for business as usual. The revised EPP must also align with electricity-market reforms, including the establishment of the South African Wholesale Electricity Market (SAWEM) and the development of a wholesale tariff methodology,” says Makaula.
The Green Connection is concerned that the Department’s draft wholesale tariff methodology and the revised EPP may not be fully aligned. The organisation says that the policy must give effect to the Climate Change Act, account for climate risks and vulnerabilities, and align with environmental legislation, including the polluter-pays principle under the National Environmental Management Act (NEMA).
Communities must have a meaningful say
The Green Connection says the growing number of complex electricity-sector consultation documents and proposed reforms is placing an unfair burden on civil society and vulnerable communities. It is calling on the Department of Electricity and Energy and NERSA to provide accessible explanatory material, adequate time and meaningful engagement opportunities so that communities can understand and respond to proposed changes.
“Publishing hundreds of pages of technical documents and asking communities to comment is not meaningful participation. People need accessible information and genuine opportunities to shape decisions that affect their lives and livelihoods. It is also important that NERSA receives adequate resources to fulfil its regulatory responsibilities, including reviewing asset valuation methodologies. In addition, power purchase agreements (PPAs), including their terms and pricing, must be published and subjected to public participation before approval and signing. The approval process must be transparent and consistent with constitutional requirements for just administrative action and the Promotion of Administrative Justice Act (PAJA),” says Makaula.
Fairer electricity choices for households
The Green Connection supports time-of-use (TOU) tariffs that are accessible to all consumers, allowing households to manage their electricity costs while helping to reduce peak demand. According to van Rooy, “It is critical that NERSA establishes fair rules for households who generate their own electricity and other prosumers – who are both producers and consumers, such as those with rooftop solar, who generate their own electricity. The Regulator must ensure that they are incentivised to remain connected to the grid and sell excess power without being unfairly charged for grid services.”
“Only electricity policies that protect households, uphold environmental rights and deliver affordable, reliable and clean energy, can be acceptable. As global leaders gather at COP31 to advance climate action, South Africa must ensure that its own energy transition delivers on these principles – putting people, environmental protection and energy justice at the centre of electricity reform,” concludes van Rooy.
Click here to read our full submission.