The National Energy Regulator of South Africa (NERSA) has approved the National Free Basic Electricity (NFBE) rate for the 2026/27 municipal financial year at 238,60 c/kWh while highlighting ongoing financial and administrative challenges affecting implementation of the programme.
The approved rate will apply from July 1, 2026, to June 30, 2027, and will be used by Eskom to bill municipalities for free basic electricity units supplied to qualifying households in Eskom supply areas.
According to NERSA, the free basic electricity programme is part of the Electricity Basic Services Support Tariff policy, which provides 50 kWh of electricity per month to qualifying indigent households identified by municipalities.
“It is important to indicate that NERSA’s mandate is to determine tariffs, including NFBE rates, while policy implementation rests with municipalities and national government,” says NERSA Full-Time Regulator Member for Electricity Regulation Willy Majola.
NERSA acknowledged that the free basic electricity policy remains an important mechanism for promoting electricity access and affordability. However, the regulator noted that municipalities continue to face administrative, financial and technical constraints in implementing the programme.
One of the key challenges identified by NERSA is that equitable share allocations used to fund free basic services are not ring-fenced, meaning municipalities are not legally required to account for these funds separately in their budgets.
According to the regulator, this creates difficulties in financially constrained municipalities where funding intended for free basic services may be affected by broader fiscal pressures, making it difficult to directly trace expenditure to specific policy objectives.
NERSA said addressing these constraints will require continued efforts to expand programme coverage, improve beneficiary targeting accuracy and strengthen intergovernmental co-ordination.
