How Flawed Tariffs Are Worsening South Africa’s Power Crisis

Summary

South Africa's municipal power crisis is worsening due to flawed policies and rising tariffs set by the National Energy Regulator of South Africa (Nersa). Every year, Nersa determines the electricity tariffs that municipalities charge consumers and businesses. However, these tariff adjustments often do not match the realities on the ground, leading to financial strain on both municipalities and residents. Municipalities depend heavily on electricity sales for revenue but struggle with outdated infrastructure and high operational costs. As a result, many municipalities face financial difficulties, which can lead to poor service delivery and frequent power outages. The current system makes it harder for small businesses and households to budget for rising electricity costs. Without reform in tariff setting and better management of resources, the power crisis is likely to deepen, affecting economic growth and increasing living costs in many communities.