Traditionally, South African municipalities apply to NERSA (National Energy Regulator of South Africa) every year to set their electricity tariffs. In the past, Buffalo City used a system where residents had to pay a fixed monthly basic charge before they even used a single kilowatt of power. For the 2026/2027 financial year, that baseline fee was set to be around R530.
Recognizing that this was a massive barrier for low- and moderate-income households, the social housing sector successfully lobbied for a change.
- The New Structure: Buffalo City is removing that fixed monthly fee entirely for qualifying residents.
- The Replacement: It is being replaced by a flat, user-based rate. This means households are only charged for the actual electricity they consume, providing immediate financial relief.
Who Qualifies?
Rather than creating an overly complicated screening system, Buffalo City is taking a blanket approach within the sector. Because the social housing program is a government-regulated rental stream designed for low-to-moderate-income citizens, they are treating the entire group as eligible. The Rule of Thumb: To qualify for this pro-poor tariff, a resident simply needs to reside in an accredited and regulated social housing property within the municipality.
Why Isn’t This Happening Everywhere?
Pooe noted that while this is a massive win and a historic first for South Africa, it really should be the norm rather than the exception. Many municipalities have been slow to adopt similar structures, which is particularly tough on families who have migrated to larger metros in search of economic opportunities. However, now that Buffalo City has proven it is entirely possible to work with NERSA to approve a pro-poor tariff, NASHO and its partners are planning to aggressively lobby other municipalities across the country to follow suit.
Listen to the full interview below to hear Karabelo Pooe discuss how the new electricity tariff structure will lower fixed electricity charges for qualifying social housing developments and offer relief to lower-income households