South African electricity consumers will face an 8.76% tariff increase in April this year, followed by a further 8.83% hike in April 2027, the National Energy Regulator of South Africa (Nersa) announced.
The increases are substantially higher than the 5.36% and 6.19% initially approved for the 2026-’27 and 2027-’28 financial years respectively, and come after a High Court judgment in December remitted Nersa’s decision on Eskom’s Generation Regulatory Asset Base (RAB) for redetermination.
The announcement has reignited criticism of the regulator following its admission in September last year of a multi-billion-rand miscalculation in Eskom’s revenue determination.
According to Nersa, the redetermination was conducted using the approved Multi-Year Price Determination 4 (MYPD4) methodology, following a public consultation process in line with the court judgment.
“This process entailed Nersa undertaking a detailed, component-by-component recalculation of Eskom’s Generation RAB, using the same information originally submitted by Eskom in its MYPD6 application and applying the approved methodology strictly,” the regulator said in a statement.
The regulator said it adopted a phased approach to implement the additional revenue for Eskom, which would limit price impacts to single-digit increases and avoid any retrospective adjustment for 2025-’26.
“It further reduces tariff volatility and demand erosion risk and balances Eskom’s financial sustainability with customer affordability. No retrospective tariff increases were applied,” Nersa said.
The regulator defended the increases as consistent with statutory tariff principles requiring tariffs that enable an efficient licensee to recover the full cost of licensed activities, including a reasonable return.
However, the decision has drawn sharp criticism from civil rights groups and political figures, particularly in light of Nersa’s admission last year that it had underestimated Eskom’s costs by R54 billion. This figure has however now ballooned to R76 billion.
The DA has escalated Nersa’s R54 billion electricity pricing debacle to the Public Protector, demanding investigation into what the DA calls, “one of the most staggering regulatory failures in recent memory”.
Civil rights organisations Outa and AfriForum condemned what they described as a secretive settlement between Nersa and Eskom over the calculation error, warning of serious consequences for consumers.
Nersa chair attributed the R54 billion miscalculation to a clerical oversight and administrative error, saying responsible staff had been suspended and new quality-control measures introduced.
The regulator acknowledged in January that it had “bent the rules” by conducting what critics described as a secret R54 billion settlement without proper public consultation, and committed to redoing the determination through a public comment process.
Cape Town mayor Geordin Hill-Lewis has previously called on Nersa to halt the tariff hikes, arguing that Eskom is now in a better financial position and generating profits.
“Nersa must stop the additional hike and Eskom’s tariff application, which is riddled with errors, must be redone,” Hill-Lewis said.
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