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