Overstrand electricity costs: what ratepayers need to know

Over the past 12 months I have conducted extensive research into the increases in electricity accounts implemented during the past two years in the Overstrand. This investigation only began after I received multiple complaints from ratepayers about electricity bills that far exceeded what they expected based on the advertised tariff increases.

My research quickly revealed that while the increase in the electricity rate per kWh remained within the 12.75% limit stipulated by the National Energy Regulator(NERSA), the fixed charges were increased by a much higher percentage. These fixed charges must be paid even if no electricity is used. As a result, the less electricity you use, the higher the effective percentage increase you experience.

I submitted complaints about these excessive increases to both Eskom (regarding Eskom direct customers) and the Overstrand Municipal Manager (regarding ratepayers who purchase electricity from the Overstrand Municipality).

The Overstrand Municipal Manager did not respond. Eskom’s position was simply that they set the tariffs and customers must accept them.

I therefore escalated four separate complaints to the National Energy Regulator(NERSA). These complaints covered the following categories:

• Eskom direct prepaid meters
• Eskom direct monthly billing
• Municipal prepaid meters
• Municipal monthly billing

I engaged extensively with the regulator via email and also attended two online meetings with them. It became clear that the regulator had approved all of the above tariffs. As a result, the possibility of refunds was effectively ruled out.

I then reminded the regulator of its obligation to protect consumers from excessive pricing and requested that they consider relief for customers who had been significantly impacted by these increases, for example by reducing tariffs in the coming year.

Their response was that I should submit written comments when the next tariff process opens. At that point it became clear that continuing the discussion would achieve little, and I ended the meeting.

My conclusion is that the regulator has little intention of protecting consumers in this matter and has largely approved what was placed before it in relation to Overstrand tariffs. I suspect that similar practices occur well beyond the borders of the Overstrand, and in my opinion NERSA has failed its obligation to the consumer.

It should be obvious that debate around electricity tariff increases becomes meaningless if fixed charges are not regulated alongside the per-kWh price.

A quick review of the municipality’s proposed new tariffs for 2026/2027 reveal that they are following the same strategy we have suffered over the past 2 years. While the increase in the energy rate per kWh remains within the advertised range, fixed charges are being increased by up to 18%.

See Annexure B2 from page 32 to 39 on the official Overstrand Webpage

In short, what we are seeing amounts to a sleight-of-hand trick. The municipality publicly emphasises that their electricity tariff increases are marginally lower than the regulator’s guideline creating the illusion that all is good and well, while quietly increasing some of the fixed charges far beyond the “average increase” advertised in the media. Few people have the time or desire to work through lengthy documents to determine what the actual increase will be, therefore I suspect few objections were received.

While not exactly criminal, this conduct is morally questionable and should be a red light to all Ratepayers. Clearly our administration needs to be watched closely.

There is however more to it. The “Cost of Supply Study” was done in 2023, and a council resolution was taken on 24 April 2023 that “a series of public meetings will be held across the Overstrand to explain the purpose of this report.”

It appears that the Cost of Supply study, which forms the basis of the new tariff structure, may never have gone through the full public participation process originally promised by Council in April 2023. Apart from a few cursory mentions of the cost of supply study at selected ward meetings, there is little evidence that these meetings ever took place.

Even more concerning is that Council apparently approved the latest increase (2026) before the comment period has closed, which would be unlawful. This may well be the reason why, for the first time ever, notices are currently being circulated by our Administrators, asking Ratepayers to submit their comments on the electricity price increase.

Commenting will of course be a futile exercise if the increases have already been approved. Even so, we encourage residents to carefully review the proposed tariff increases and submit objections before 26 March 2026 by clicking HERE.

What I have written here has come to light due to the close corroboration of Ratepayers that take an interest in the doings of local government on behalf of all of us. Organizations like OCAN as well as the newly formed OVAC have become essential to ensure that the rights of Ratepayers and Residents are not infringed upon.

Please consider adding your mandate to the approximately 1200 Ratepayers OVAC currently represents. You can view our constitution at OVAC CONSTITUTION signed.pdf , download our mandate at Mandate to the Overstrand Accountability Collective (OVAC) final and submit said mandate to [email protected].