By 
BLOEMFONTEIN — South Africa’s transition toward a modernized, multi-market power sector has reached another major milestone following Cabinet’s approval of the Revised Electricity Pricing Policy (EPP) and the Draft Electricity Sector Market Transformation Position Paper for public comment.
The move, formally welcomed by Bloemfontein-based electricity distributor CENTLEC (SOC) Ltd, represents a critical shift away from the country’s historic state-controlled monopoly model toward a competitive energy market designed to attract investment and stabilize long-term power costs.
The policy updates align municipal-level distribution directly with national structural reforms, including the implementation of the Electricity Regulation Amendment (ERA) Act of 2024, Eskom’s ongoing unbundling, and the broader Energy Action Plan.
Updating a Decaded-Old Pricing Architecture
A core component of the announcement is the overhaul of the 2008 Electricity Pricing Policy. The newly Revised EPP addresses structural shifts in the sector, establishing a clear framework for transparent, unbundled tariffs across generation, transmission, distribution, and retail.
Under the revised structure, billing interfaces will be streamlined across key actors—including power generators, electricity traders, the National Transmission Company South Africa (NTCSA), and local municipal distributors—under the regulatory oversight of the National Energy Regulator of South Africa (NERSA).
“The alignment toward cost-reflective pricing is a necessary step to ensure the financial health, viability, and ongoing maintenance capabilities of local electricity distributors,” CENTLEC stated.
Crucially, the policy framework balances cost-reflective pricing with social protection mechanisms. It retains targeted support for vulnerable households and indigent consumers while establishing safeguards for key economic sectors to ensure the broader energy transition remains socially equitable.
Breaking the Single-Supplier Model
Complementing the pricing reforms, the Draft Electricity Sector Market Transformation Position Paper outlines the roadmap for transitioning South Africa to an open, competitive electricity market.
By enabling independent trading and diversifying generation sources, the framework aims to significantly reduce reliance on a single primary supplier, addressing the structural vulnerabilities that have historically impacted national grid reliability.
From an economic perspective, the policy aims to:
- Catalyse Private Investment: Unlocking capital inflows for modernizing generation, transmission, and distribution networks.
- Drive Regional Development: Accelerating local economic activity and job creation through network expansion and infrastructure upgrades.
- Control Escalating Costs: Utilizing market efficiencies and competitive trading to curb long-term tariff hikes for commercial and residential consumers.
Focus Shifts to Public Participation
As the draft papers open for public comment, CENTLEC has called on local business chambers, consumer advocacy organizations, and residents within the Mangaung Metropolitan Municipality to engage directly in the consultation process.
The utility emphasized that strong public and institutional input will be vital to ensuring the finalized frameworks accommodate municipal operational realities while delivering sustainable, reliable power to end-users.
