The National Energy Regulator of South Africa (NERSA) has approved a national free basic electricity (NFBE) rate of R1,94 per kilowatt-hour (kWh) for the 2024/25 municipal financial year. This rate will come into effect on July 1.
The NFBE rate is crucial as it determines how municipalities compensate Eskom for providing free basic electricity (FBE) units to eligible customers. FBE is designed to supply sufficient electricity for essential needs such as basic lighting, media access, water heating with a kettle and ironing. This service is available to domestic electricity users and those relying on non-grid systems supplied by local municipalities or utility providers.
The funding for FBE is sourced from National Treasury, which allocates these funds to local authorities through an equitable share distribution, as identified by the Department of Cooperative Governance and Traditional Affairs. These grants from national government are intended to help local authorities provide basic services to low-income households.
In accordance with section 15(2) of the Electricity Act, a licensee is prohibited from charging customers any tariff other than those approved by the energy regulator. The NFBE rate is adjusted annually based on a methodology that NERSA approved in March 2021.
NERSA is currently in discussions with relevant government departments to review the provision of 50 kWh of free electricity per month – a policy that has been in place since 2003.
