Background
On 28 August 2026, the Department of Electricity and Energy (DEE) published the Revised Electricity Pricing Policy (EPP) 2026 in the Government Gazette for public comment. The policy sets out how electricity will be priced across generation, transmission, distribution and retail for the next phase of South Africa’s electricity supply industry, and introduces several changes that will directly affect commercial, industrial and mining energy users. Comments close 30 days from publication, on Monday, 28 September 2026 at 12:00.
This briefing summarises the proposals most relevant to large energy users, highlighting both the positive developments and the risk areas worth your attention, and outlines the areas we recommend you consider before the consultation period closes.
Key Proposed Changes
- Standby / capacity charges on self-generation: a new wholesale-level standby charge is proposed to recover the cost of providing backup capacity to all customers, including those with their own generation (solar, wind, wheeled supply). The policy itself acknowledges this methodology isn’t yet settled, leaving room to argue for a narrower, cost-reflective design;
- Full network charges on wheeled energy: wheeled energy would attract the same Distribution and Transmission Use-of-System (DUoS/TUoS) charges as standard grid supply, plus wheeling administration costs, narrowing the cost advantage many private PPAs were built on. On the positive side, the policy affirms wheeling access as a formal obligation on network owners rather than a discretionary grant — though no transitional protection is proposed for arrangements signed before the policy takes effect;
- Combined effect for self-generators: taken together, the standby charge, full wheeling network charges, mandatory time-of-use tariffs on exports, and export credited only at avoided-purchase-cost (not full retail value) could materially erode the return on existing self-generation investment;
- Shift from volumetric to fixed/demand-based network charges: DUoS charges are proposed to unbundle into a minimum fixed capacity charge plus demand- or consumption-based charges (Policy Position 30(d)), with a five-year window set for the broader transition to cost-reflective network charges (Policy Position 30(f)). Together, this raises the importance of demand management;
- TOU/capacity pricing extended to generators: generator pricing (Eskom, IPPs, embedded generators) would also be split into capacity, energy and time-of-use differentiated ancillary charges, mirroring the demand-based signal applied to consumers;
- Net-billing and embedded generation: customers exporting energy into the grid would be required to be on a time-of-use tariff at minimum, with network and retail charges never credited against exported energy value;
- Transmission geographic (zonal) pricing under review: current distance-based transmission pricing for loads is retained for now; the policy concedes the methodology is arbitrary, but commits only to a review “from time to time,” with no fixed deadline;
- Negotiated Pricing Agreements (NPAs): a structured, newly time-bound (60-day) mechanism allowing deviation from standard tariffs for businesses at genuine risk of closure, or seeking to restart dormant capacity, requiring dtic support and NERSA approval. Existing NPAs will be honoured until the end of their contract, though detailed evaluation criteria for new applications are still to be finalised;
- Wider planning and pricing framework: on the positive side, NERSA must also publish a national electricity price path at least five years forward (updated every two years) and develop one consistent tariff and cost-of-supply framework across all distributors within 12 months, alongside a faster approval process for new products such as curtailable rates and real-time pricing, and rules preventing customers from being charged twice for the same infrastructure — all aimed at improving predictability and fairness for large energy users; and
- Areas still to be finalised: several other elements remain undeveloped, including a national subsidy framework that could shift cost burden onto large users as self-generation grows, and a proposed carbon/environmental cost pass-through in wholesale pricing with no mechanism or quantum detail yet provided.
Who Should Be Paying Attention
These proposals are most relevant if your business under the draft Revised Electricity Pricing Policy (EPP):
- Has entered into, or is negotiating, private PPAs or third-party wheeling arrangements for renewable energy;
- Operates its own embedded generation (solar PV, diesel, gas, or otherwise) alongside grid supply;
- Is energy-intensive relative to revenue, such that electricity cost movements have a material effect on margin;
- Operates facilities in remote or non-metro locations where transmission zonal charges apply;
- Is currently evaluating the viability of an operation or facility where electricity cost is a material input; or
- Is a generator, IPP or embedded generator facing TOU-differentiated capacity, energy and standby charges under the revised wholesale framework.
Areas for Consideration
- Re-test the business case for existing or planned PPA and wheeling arrangements against the proposed standby charge and full DUoS/TUoS pass-through, to establish the revised net saving;
- Review embedded generation and net-billing arrangements for exposure to mandatory time-of-use tariffs and non-creditable network charges;
- Assess demand (kVA) profiles ahead of the shift to fixed/demand-based network charges, and identify demand-management opportunities;
- Commission a bill analysis to identify a net increase for low-load-factor or self-generating customers, on top of the new standby charge;
- Where an operation is at risk, evaluate eligibility for a Negotiated Pricing Agreement and the dtic motivation this would require; and
- Consider submitting comments before the closing date, particularly on the standby charge and wheeling cost treatment, which are likely to be the most contested elements of the policy.
Next Steps
We recommend reviewing the draft policy against your existing energy contracts and site profiles, and considering a formal submission before the consultation period closes on Monday, 28 September 2026 at 12:00.
If you need support preparing a submission or assessing how the draft regulations could affect your business, please contact us.
Christo Engelbrecht
christo@catalystsolutions.global
+27 84 513 8177
