The National Energy Regulator of South Africa (Nersa) has published the draft market inquiry report on the impact of fixed charges levied by electricity distributors and State-owned entity Eskom’s unbundled generation capacity charge, legacy charge and variable energy charge for stakeholder input and comment.

The draft findings indicate that, although the movement towards more cost-reflective tariffs has an important regulatory rationale, the impacts of tariff restructuring differ across customer categories depending on consumption patterns, load factors, operational requirements and the ability to respond to tariff signals, Nersa says in a statement.

The draft report highlights, among other matters, the impact of time-of-use tariff restructuring on certain customer categories, including agricultural customers whose consumption patterns are often influenced by production cycles and operational requirements, limiting their ability to shift electricity use.

The report further considers the implications of tariff design for South Africa’s evolving electricity market, including the need for transparent cost allocation, efficient competition and a regulatory framework that supports long-term sustainability and consumer protection.

The publication of the draft report marks a significant stage in Nersa’s market inquiry process and gives stakeholders an opportunity to engage with the approach followed in conducting the inquiry, the evidence considered, the findings reached and the recommendations proposed, the regulator says in a statement.

The consultation process is intended to promote transparency, inclusivity and evidence-based regulatory decision-making by allowing affected parties and interested stakeholders to provide additional perspectives, clarify issues, submit further information and comment on whether the draft findings and recommendations appropriately address the matters considered during the inquiry, Nersa informs.

The inquiry was initiated following concerns raised by customers and industry participants regarding the structure, transparency, justification and practical impact of fixed charges and Eskom’s tariff restructuring under the approved Retail Tariff Plan. 

The inquiry considered whether the implementation of these tariff changes achieved the intended objectives of improving cost reflectivity and strengthening long-term sustainability, while maintaining affordability, fairness, transparency and efficient electricity market outcomes, Nersa explains.

It notes that the draft report is informed by stakeholder submissions, public hearing inputs, tariff analysis, customer consumption data and regulatory assessments.

Stakeholders who participated in the inquiry included municipalities, Eskom, organised business, agricultural organisations, energy-intensive users, industry associations, consultants, traders and individual electricity customers.

Nersa has called on interested and affected parties, including electricity customers, municipalities, Eskom, industry participants, business organisations, agricultural bodies and consumer representatives to review the draft report and submit written comments on the approach, findings and recommendations.

Comments received during this consultation process would assist the regulator in refining the report and ensuring that the final market inquiry report reflects the evidence and perspectives provided by stakeholders.