Poor households could get up to 300kWh free electricity a month

Proposed changes to South Africa’s electricity pricing policy could lead to poor households receiving up to 300kWh of free basic electricity a month.

Speaking at a briefing in Pretoria, electricity and energy minister Kgosientsho Ramokgopa said there is a proposal to increase the current free basic electricity allocation from 50kWh to between 200kWh and 300kWh a month for qualifying households.

The proposal comes as the government reviews the changes in how the electricity needs of households have changed since the free basic electricity programme was introduced more than 20 years ago.

Ramokgopa said the profile of low-income households had changed significantly.

“The poor, as we understood them previously, has changed significantly to today,” he said.

He said even households under financial pressure now relied on appliances and technology such as televisions, cellphones, fridges and electric kettles.

“That was not in our earlier computation of 2000, about 2001 or so, when we put together the free basic dispensation,” he said.

Ramokgopa has said the increase would not require an additional allocation from the fiscus. Instead, government wants to make better use of the money already set aside for free basic electricity.

The minister has previously raised concerns about money intended to support poor households being lost through inefficiencies in the municipal system.

He said only a portion of households that qualify for free basic electricity currently benefit from it because of problems including outdated indigent registers and the way funding is administered.

The government is proposing a more centralised and digital system to ensure that the subsidy reaches the households it is intended for.

Ramokgopa said the policy was also aimed at protecting poor households while making electricity pricing more transparent.

The proposed changes come as the government tries to address the growing cost of electricity for households and businesses.

The policy will also move tariffs towards cost-reflective pricing over a five-year period, while retaining free basic electricity and lifeline tariffs for poor and vulnerable households.

Ramokgopa said electricity tariffs should no longer be used to cover inefficiencies at Eskom or municipalities.

“A consumer can be burdened by bad decisions that are made, either at Eskom or at municipalities.”

The revised Electricity Pricing Policy has been approved by cabinet and will be published for public comment on Friday before it is finalised.

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