Nersa approves free basic electricity rate for poor households

Nersa has approved a National Free Basic Electricity (NFBE) rate of 194.40c/kWh for the 2024/25 municipal financial year.

Nersa made the decision at its meeting held on 30 May 2024. The new rate will be effective from 1 July 2024.

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The NFBE rate is the rate at which municipalities compensate Eskom for providing free units to qualifying customers.

According to Eskom, the qualifying households are identified by the local municipalities. The municipalities include these households in a list of FBE beneficiaries and submit the list to Eskom.

This enables the beneficiaries to collect their FBE vouchers on a monthly basis from Eskom vending outlets.

The maximum amount is between 50kWh and 60kWh per household, depending on the municipality of residence.

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The customer is then charged for anything used above this limit. Only one FBE voucher is accepted by the meter during a specific month.

Nersa on FBE benefit

Free basic electricity is the amount of electricity deemed sufficient to provide basic electricity services to poor households.

“This amount of energy should be sufficient to provide basic lighting, basic media access, basic water heating using a kettle and basic ironing in terms of grid electricity, as well as basic lighting for domestic electricity users and non-grid systems supplied by the local municipality or utility provider,” said Nersa.

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The National Treasury provides the FBE funding to local authorities through equitable share allocation, as identified by the Department of Cooperative Governance and Traditional Affairs (CoGTA).

The Local Government Equitable Share Funds are funds granted by the national government and are equitably distributed to local authorities to supplement their internally generated revenues and provide basic services to poor households.

According to section 15(2) of the Electricity Regulation Act, 2006 (Act No. 4 of 2006) (‘the ERA’), a licensee may not charge a customer any tariff other than that determined or approved by the energy regulator as part of its licensing conditions.

The NFBE rate is adjusted annually.

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“Nersa is engaging with all the relevant government departments with regard to reviewing the 50kWh units per month, considering the changes in the economic conditions since this was first implemented in 2003.”

Eskom-supplied customers who wish to know whether they qualify for the FBE benefit should contact their local municipal office, local ward councillor or a community development worker.