So far, 90 residents have submitted feedback on the proposed electricity tariffs, but only 13% reported reading the full tariff document. To make it easier, we have prepared a summary to help you understand the key points and provide informed feedback.

The National Energy Regulator of South Africa (NERSA) has approved a 9.01% increase in Eskom’s bulk electricity prices, resulting in an 8.5% increase in electricity tariffs for Overstrand Municipality customers, effective 1 July 2026. This marks the third year of a four-year Cost of Supply (CoS) implementation plan, which ensures that tariffs reflect the true cost of providing electricity to all customers.

Why tariffs are structured this way:

As required by NERSA, municipalities must conduct a Cost of Supply (CoS) study at least every five years, or sooner if there are significant changes in customer numbers, cost structures, or electricity usage patterns. The CoS study ensures that electricity tariffs are fair, transparent, and cost-reflective.

Under NERSA guidelines:

• Tariffs must comply with the Electricity Pricing Policy and reflect the actual cost of supply.
• Small customers (domestic and business) should pay tariffs structured with a basic charge (covering metering, billing, and customer services), a capacity charge (based on connection size), and an energy charge (covering generation, losses, and surplus costs).
• Large customers are charged using a Time-of-Use (ToU) tariff aligned with Eskom’s Municflex structure for the Overstrand area.

Overstrand’s previous tariff increases under the CoS plan were 10.04% (2024/25), 9.96% (2025/26), and 8.50% (2026/27), with 2027/28 still to be announced, following Eskom bulk price changes.

How the Tariff Changes Affect You:

Indigent customers: Residents who qualify under the Municipality’s Indigent Policy will continue to receive subsidies. These cover the basic electricity charge, the capacity charge for up to 30 Amps, and Free Basic Electricity. The cost of these subsidies is offset by the Equitable Share Grant from the national government, ensuring support for households most in need.

Small customers (domestic and business): Tariffs for smaller users are fully cost-reflective, meaning they more accurately represent the real cost of supplying electricity. The tariff structure includes:

• A basic charge covering fixed costs such as metering, billing, revenue collection, and customer service.
• A capacity charge based on the installed or limited capacity of the customer’s connection.
• An energy charge that accounts for the full cost of electricity, including generation, transmission losses, and surplus requirements.

Large customers: These customers will be charged using a Time-of-Use (ToU) tariff, which varies depending on when electricity is used, aligned with Eskom’s Municflex tariff structure in the Overstrand area. This ensures that large consumers are charged according to their usage patterns, promoting efficiency and fairness.

How to comment:

Overstrand residents, please take note of the upcoming 8.5% electricity tariff increase, which will affect your household expenses. This increase is in addition to the annual budget adjustments that will be tabled before Council at the end of March.

The full documentation considered by Council on 27 February 2026 is available on the municipal website: www.overstrand.gov.za > Documents > Electricity

To make it easier to understand, the Municipality has provided a simplified Q&A with an open comment section. Residents are encouraged to review the information and submit feedback by 12:00 midday, 26 March 2026.

You can submit your comments:

• Online: https://forms.office.com/r/yEq6KuHAn2 or where applicable Email: cfo@overstrand.gov.za
• In person: Visit a Public Liaison Officer in Gansbaai, Hermanus, or Kleinmond during office hours for assistance.

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Upcoming 8.5% Electricity Tariff Increase

Overstrand Municipality is approaching its third year of Cost of Supply (CoS) implementation and the proposed electricity tariff changes for the new financial year (2026/27), set to be implemented on 1 July 2026. Following a court order dated 20 February 2026, municipalities are required to submit their electricity tariff applications to the National Energy Regulator of South Africa (NERSA) by 31 March 2026.

During a special council meeting on 27 February 2026, the following was approved:

1. Acknowledgment of the CoS study and its four-year implementation, starting July 2024.
2. Approval to implement 2026/27 tariff changes as part of the third year of the CoS plan.
3. Acknowledgment of a new CoS study for 2026/27 to update tariffs, as the current study will expire in 2027.
4. A public participation process for the proposed 2026/27 tariffs to ensure transparency.
5. Submission of the proposed tariffs and CoS study to NERSA for approval after the public participation process.

With time running out, the Municipality is urging residents to participate in the public consultation process to ensure they are informed (or at least aware) of the proposed tariff changes and have the opportunity to review and provide feedback before the final submission.

Price Increase:

NERSA has approved a 9.01% increase in bulk electricity purchase prices to Eskom (announced 13 February 2026), resulting in an effective 8.5% tariff increase for the Municipality.

The purpose of the CoS study is to ensures that all customers, both small and large, pay tariffs that accurately reflect the cost of service to each customer category.

Proposed Tariff Structure:

• Indigent Customers: Those who qualify will continue receiving subsidies for basic charges, capacity charges (up to 30 Amps), and Free Basic Electricity, supported by the Equitable Share Grant.
• Small Customers: Tariffs for domestic and business customers will reflect the full cost of supply, which includes:

– A basic charge to reflect the fixed costs of metering, billing, revenue collection and customer services
– A capacity charge based on the customer’s installed/limited capacity
– An energy charge that covers the full energy cost, losses, and surplus requirements

• Large Customers: These customers will continue to be charged based on the Time of Use (ToU) tariff, aligned with Eskom’s Municflex tariff structure.

Implementation Timeline:

The tariff changes are being phased in over four years, with the 2026/27 financial year marking the third year of implementation. The proposed increase of 8.5% follows increases of 9.96% in 2025/26 and 10.04% in 2024/25.

Submit comments:

The local community and affected parties are invited to submit comments or representations on the FY2026/27 Electricity Tariffs that are based on the Municipality’s cost of supply study.

Such comments or representation must be submitted by not later than the 26 March 2026 at 12:00 midday. Comments received after the closing time will not be considered.

Please submit your comments to us by completing the form available on www.overstrand.gov.za > Documents > Electricity (Have Your Say) or click here: https://forms.office.com/r/yEq6KuHAn2

As a last resort, you can send your comments via email to cfo@overstrand.gov.za. Any person who cannot write, or does not have access to email or the internet, may visit the Overstrand Municipality’s Public Liaison Officers in Gansbaai/Stanford, Hermanus, or Kleinmond (during office hours), where they will assist you to complete the form to submit your comments.

Download the item that served before Council on 27 February 2026: https://www.overstrand.gov.za/document/electricity/have-your-say-85-electricity-tarrif-increase/electricity-tarrifs-cost-of-supply-2026-02-27/?layout=file
or go to www.overstrand.gov.za > Documents > Electricity (Have Your Say).