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The full impact of Nelson Mandela Bay’s new electricity tariffs is beginning to emerge, with low-consumption households facing massive increases after the municipality abolished the inclining block tariff and introduced a single flat rate.
The previous tariff system charged residents progressively higher rates per kilowatt-hour (kWh) as their electricity consumption increased.
The increasing block tariff was intended to discourage excessive electricity use while ensuring that higher-consumption households effectively subsidised those using less power.
The council adopted the 2026/2027 budget on June 8, which included an average electricity tariff increase of 10.95%.
This overhaul came as the municipality began phasing out the increasing-block tariff in the 2021/2022 financial year.
However, the system was completely removed for the 2026/2027 financial year, resulting in unexpected costs for households.
The change affects residential customers using prepaid meters and those on credit accounts, but not businesses.
For the 2025/2026 financial year, electricity tariffs, including VAT, were structured into three consumption blocks:
- Block 1: 0 to 250kWh (units) at R3.48 each;
- Block 2: 251 to 500kWh (units) at R4.12 each; and
- Block 3: More than 500kWh (units) at R4.57 each.
But with the increasing block tariff now fully abolished, residents are charged a single flat rate of R4.50 per kWh (unit) for the 2026/2027 financial year, which came into effect on July 1.
For households purchasing fewer than 250 units a month, this represents a 29% increase compared with the previous financial year.
When comparing purchases in block 2 to the current financial year, the increase is 18.7%.
And for those using more than 500 units, the increase is 11.2%.
Indigent households will pay R4.09 per unit.
Last month, Brymore resident Clive Hassell bought R843.32 worth of electricity and received 242.2kWh.
This month he spent R893.32 for 192.2kWh.
“It was a hidden shock for many people, especially poor people,” he said.
“Compared with the price our neighbouring municipality is charging, it is a complete rip-off.”
His comparison was for the Kouga municipality which still uses an inclining tariff structure.
Motherwell resident Boniswa Lungiza purchased R40 worth of electricity at the indigent tariff of R4.09 per kWh, receiving 9.8kWh at the start of this month.
Last month, she received 16.4kWh.
“I am not happy. The cost is just too much.”
Municipal spokesperson Sithembiso Soyaya said the municipality recognised that households and businesses continued to face significant financial pressures.
He said it was crucial to distinguish between the approved average tariff increase and the impact on individual customer categories.
“The approved average increase of 10.95% applies across the municipality’s entire electricity tariff basket and was approved by the National Energy Regulator of South Africa (Nersa) following a detailed cost of supply study, technical evaluation, financial assessment and public participation process.”
He said the percentage increases experienced by individual customers would vary depending on several factors, including their tariff categories, electricity consumption, tariff structures and fixed network charges.
“Accordingly, individual customers will not necessarily experience the same percentage adjustment as the approved average.
“Electricity tariffs are designed to recover the efficient cost of providing electricity services while balancing affordability, equity and financial sustainability.
“More than 70% of the municipality’s electricity expenditure is committed to purchasing bulk electricity from Eskom before electricity is distributed to customers.
“The remaining revenue funds the operation, maintenance, refurbishment and expansion of substations, transformers, overhead and underground networks, metering infrastructure, public lighting, system control and customer services.”
He said the removal of the inclining block tariff formed part of the ongoing alignment with Nersa’s cost of supply methodology and the Nersa retail tariff plan, both of which sought to improve cost reflectivity and transparency in municipal electricity pricing.
“The review considered changing electricity consumption patterns, the increasing uptake of alternative energy technologies, customer behaviour and the need to ensure the long-term financial sustainability of the electricity distribution service.”
He said the objective was not to remove protection for vulnerable households but rather to align the tariff structure with nationally approved regulatory principles governing electricity pricing.
“The municipality continues to protect qualifying indigent households through its approved free basic electricity programme and other approved social support measures.”
He said an impact assessment had been conducted to determine how the block tariff removal would affect different categories of consumers.
“The proposed tariffs were subjected to extensive consultation with organised business, civil society organisations, ward councillors, community stakeholders and council before being submitted to Nersa for approval.
“Stakeholder engagement resulted in several amendments to the original tariff proposal.
“For example, the proposed commercial prepaid tariff increase was reduced from 60% to 12% following stakeholder engagement and regulatory review.
“This demonstrates that the final tariff structure was informed by both technical analysis and meaningful public participation.”
He said the municipality acknowledged that customers might experience the approved tariff changes differently depending on their individual consumption patterns and tariff categories.
“However, the approved tariff structure reflects the outcome of an independently regulated cost of supply process that seeks to balance affordability, equity and the financial sustainability of the electricity distribution service.
“The municipality has a statutory responsibility to ensure that sufficient revenue is available to maintain, renew and modernise critical electricity infrastructure.
“Failure to implement cost-reflective tariffs would accelerate infrastructure deterioration, increase the frequency of outages and ultimately result in significantly higher costs for residents in future.
“We acknowledge that every tariff adjustment requires residents to make difficult financial decisions and we do not take these concerns lightly.
“At the same time, the municipality has both a constitutional and statutory obligation to provide a reliable electricity service that is safe, financially sustainable and capable of supporting economic growth, investment and improved quality of life.
“This responsibility requires balancing affordability with the long-term sustainability of critical public infrastructure.
“A financially sustainable electricity distribution business is fundamental to reducing outages, improving service reliability and protecting the long-term interests of residents and businesses.
“Deferred investment may provide short-term relief but inevitably results in deteriorating infrastructure, more frequent service interruptions and significantly higher costs in future.”
SA National Civic Organisation regional deputy secretary Vuyile Mayedwa said the organisation strongly opposed the tariff increases.
“Our communities face persistently high unemployment, rising poverty and an ever-increasing cost of living,” Mayedwa said.
“Many households are already struggling to afford necessities.
“Imposing higher municipal tariffs under these conditions places an unbearable burden on residents who are receiving inadequate value for the money they are paying.
“Citizens deserve value for money, transparency in how public funds are spent and a municipality that places the interests of its people first.”
He called on the municipality to review the tariff increases in light of the prevailing socioeconomic conditions.
Ward 7 councillor Brendon Pegram wrote to acting city manager Lonwabo Ngoqo on March 12, warning the municipality that residents should not bear the brunt of the substantial losses in the electricity and energy department.
“In the 2024/2025 financial year, the audited statements of the municipality showed that the department ran at a loss of R1.48bn.
“Said directorate is for all practical purposes insolvent, and therefore the municipality has to absorb the financial loss that the directorate is incurring annually.
“This unacceptable situation has a profound impact on the future financial sustainability not just of the directorate but also of the municipality.
“It is our considered view that the electricity and energy directorate has made no progress in dealing with the large-scale electricity theft by nearly 130,000 formal households in the city and, as such, continues to incur massive electricity losses culminating in the aforesaid financial loss.
“We believe that the aforesaid situation is a direct result of the continued mismanagement of the directorate given the lack of qualified, senior staff to lead the directorate.”
He said it was immoral to pass the cost of mismanagement on to residents.
In statement, FF+ councillor Bill Harington said his party strongly opposed the decision to abolish the domestic inclining block tariff and replace it with a flat electricity rate for households.
He said the municipality had removed an important mechanism that had promoted affordability and energy efficiency.
“Many households are now expected to pay more for their first units of electricity, placing additional financial pressure on pensioners, low- and middle-income families and residents who have made every effort to reduce their electricity consumption,” Harington said.
“The block tariff was never only about pricing.
“It encouraged responsible energy use, reduced unnecessary demand on the electricity network, helped ease pressure on substations and transformers during peak periods and contributed to the long-term sustainability of the municipal electricity grid.”
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