NERSA announces tariff hikes

Consumers will have to dig deeper into their pockets come 1 April as the National Energy Regulator of South Africa (NERSA) announced its decision on the Eskom tariff hike application.

The energy regulator announced during an online media briefing on Thursday its decision on Eskom’s Sixth Multi-Year Price Determination (MYPD6) revenue application for the 2025/26, 2026/27 and 2027/28 financial years.

PICTURE: Pixabay

Eskom had applied for a tariff increase of 36% in 2025, 12% the following year, and 9% in 2027/28.

 “For the financial year 2025/26, the energy regulator approved an allowable revenue of R384 billion, which will amount to a 12.74% increase. For the year 2026/27, the energy regulator approved the allowable revenue of R409 billion, which amounts to a 5.36% increase. For the final year of the application, the energy regulator approved the allowable revenue of R435 billion, which amounts to 6.19%,’’ said Nersa chairperson Thembani Bukula.

He said the decision was taken while considering the concerns raised by members of the public during the extensive consultation process at the end of 2024.

“Top of the list in this was the affordability, if the prices applied for by Eskom were approved. This was voiced by domestic customers, as well as the business customers who came to our public hearings. The domestic customers stressed the fact that if these prices are approved, they then have to choose between buying food or buying electricity. Businesses, on the other hand, made it clear that if these increases were approved a lot of them would be forced to close their businesses.

“Stakeholders expressed their concerns about their negotiated price agreements that were part of the application. The rising municipal debt, the cost of coal, the cost and the usage of the open-cycle gas turbines, lack of employment and job opportunities. They were quite vocal about the inclusion of the carbon tax on top of the carbon environmental levy.”

At the same time, the minister of electricity and energy Kgosientsho Ramokgopa, welcomed the regulator's announcement.

"We welcome the fact that these tariff adjustments take into account the need to mitigate inflationary pressures on communities and businesses, helping to stabilise the broader economic environment.’’

The ministry says that while the approved tariff adjustments would pressure Eskom to maintain its investment strategy to strengthen and modernise its generation, transmission, and distribution infrastructure, it remained committed to working closely with Eskom to drive greater efficiency gains.

 

Done by: Mitchum George