ELECTRICITY: NERSA CALLS FOR INPUT ON COST-OF-SUPPLY FRAMEWORK AND PRICING METHODOLOGY PROPOSALS

ELECTRICITY: NERSA CALLS FOR INPUT ON COST-OF-SUPPLY FRAMEWORK AND PRICING METHODOLOGY PROPOSALS

• 10 November 2026
• Minerals & Energy
• SA Legal Academy

The National Energy Regulator of South Africa (NERSA) has gazetted a backdated notice calling for input by 7 December 2026 on a consultation paper with implications for tariff setting.

In anticipation of a workshop scheduled for 14 December 2026, the paper explores proposals for aligning the prevailing cost-of-supply framework and pricing methodology with sub-section 15(1)(aA) of the amended 2006 Electricity Regulation Act. This is noting that the sub-section was inserted in the principal statute by the 2024 Electricity Regulation Amendment Act, most of which came into force on 1 January 2025 – as SA Legal Academy reported at the time.

According to the consultation paper’s introductory section, the amendment ‘requires NERSA to allow a reasonable return proportionate to the risk of the licensed activity’ – calling for ‘a clear relationship between the return allowed, the capital invested in the licensed activity and the associated risk’. This in the context of ongoing industry reforms and ‘the current financial and operational state of many municipal distributors’.

The technical implications of the amended Act’s sub-section 15(1)(aA) for a revised cost-of-supply framework and related pricing methodology are unpacked in the consultation paper’s Annexure A

• Government Gazette notice
• consultation paper
• Annexure A
• Electricity Regulation Act, updated (SAFLII)
• SA Legal Academy report

Published by SA Legal Academy Policy Watch

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