The National Energy Regulator of South Africa (NERSA) has approved the National Free Basic Electricity (NFBE) rate for the 2026/27 financial year, setting it at 238.60 cents per kilowatt-hour (c/kWh). The new rate will come into effect from 1 July 2026 and remain valid until 30 June 2027. The approved tariff forms part of South Africa’s Electricity Basic Services Support Tariff policy, which is aimed at helping low-income households access free electricity.
Under this programme, qualifying indigent households identified by municipalities receive 50 kilowatt-hours (kWh) of free electricity every month. The initiative is designed to support poor families and ensure that municipalities meet their constitutional responsibility of providing essential basic services to communities. Municipalities are funded for this support through equitable share allocations provided by the national government.
NERSA stated that the 2026/27 NFBE rate was calculated using a methodology approved in 2021. The regulator explained that the pricing structure is intended to remain fair while also reflecting the current economic conditions. In addition to approving the tariff, NERSA also monitors the commissions paid to service providers and agents involved in distributing the free electricity units. This oversight is aimed at preventing high administrative costs from increasing the overall tariff burden.
Despite the importance of the programme, NERSA acknowledged that many municipalities continue to face serious challenges in implementing it effectively. Among the main concerns are weak administration systems, financial difficulties, and poor tracking of funds meant for free electricity services. According to the regulator, one of the biggest problems is that the funds allocated for these services are not ring-fenced. This means municipalities are not legally required to keep the money separate from other municipal finances.
As a result, some financially stressed municipalities reportedly redirect the funds to cover other urgent operational expenses. This creates uncertainty about whether the intended beneficiaries are consistently receiving the free electricity support.
To improve the programme, the Department of Electricity and Energy has established a Multi-Stakeholder Review Panel. The panel includes representatives from NERSA, the National Treasury, and the South African Local Government Association (SALGA). Its role is to review the design of the free electricity programme and develop evidence-based recommendations to improve service delivery and accountability.
NERSA said that while it is responsible for setting the tariff and ensuring financial sustainability, the successful delivery of free electricity to poor households depends on cooperation between national government departments and local municipalities. The regulator added that it will continue to provide technical guidance to support efforts aimed at improving electricity access and affordability for vulnerable communities across South Africa.
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