10.5% electricity price hike shock for South Africa
South Africans are on the hook to pay Eskom an additional R76 billion, which could see the planned price hikes for 2026 almost double.
The National Energy Regulator of South Africa (Nersa) has published a consultation document for public comment, following a court-ordered redetermination of Eskom’s allowable revenue for its MYPD6 period.
According to Nersa, it erred in calculating this revenue when it determined Eskom’s allowable price increases in 2025, which amounted to 12.7% for 2025, 5.4% for 2026, and 6.2% for 2027.
Following a review later in the year and a closed-door settlement with Eskom, the regulator attempted to get the courts to seal a deal allowing Eskom to collect an additional R54 billion through tariff hikes.
Because 2025’s increase had already been effected, the additional revenue would have come through in 2026 and 2027, with both years seeing price hikes of close to 9%.
However, after intervention from lobby group Afriforum and the Mineral Council of South Africa, the court rejected the ‘secret’ settlement, ordering Nersa to consult the public on the matter.
Unfortunately for South Africans, the consultation document from Nersa revealed another recalculation of the money owed to Eskom, which now amounts to R76 billion, adding another R22 billion to the pile.
Nersa stated that this is due to escalating costs associated with Eskom’s new builds, which are permitted to be recovered through tariff increases.
According to energy producer IMPOWER Solar, if the R76 billion adjustment is approved, it is estimated that electricity tariffs could rise by approximately 10.5% this year.
This is almost double the 5.4% originally projected before the redetermination. This would contribute to an average annual increase of roughly 15% over the last five years.
Before the MYPD6 period, a typical Eskom customer would have seen their electricity bill shoot up by almost 180% over the previous decade (2014-2024), with prices continuing to escalate at unsustainable levels.
Public comment is vital
According to IMPOWER energy expert Matthew Cruise, public comment on the proposed increases is critical, even though the timing and nature of the consultation document present challenges for meaningful public engagement.
“The release of a document of this significance on 30 December, with a submission deadline of 21 January, provides a very narrow window for the public and businesses to respond,” said Cruise.
“Furthermore, the consultation paper focuses on technical, legal and accounting questions rather than simply asking if the increase is acceptable. It effectively asks the public to provide input on how to prevent Eskom from receiving undue compensation across ten specific areas.”
He noted that the R76 billion figure stems largely from a R62 billion shortfall in depreciation and a R14 billion return on assets that NERSA admitted were incorrectly calculated in previous determinations.
“It is concerning that after 15 years of price determinations, the regulator and the utility are still in dispute over fundamental accounting principles like asset depreciation,” he said.
“The depreciation in question often relates to power stations where construction costs were significantly higher than originally budgeted. South African consumers are now being asked to cover the accounting consequences of those overruns.”
Cruise warned that the continuous hikes risk further straining the national economy.
“We are seeing a trend where the regulator seems to struggle with its core mandate: ensuring electricity remains affordable while holding the utility accountable for cost management.”
He added that South African households and businesses also carry a disproportionate burden of cost, when large industrial players are getting tariff relief and special pricing.
“When major industrial players or specific sectors receive tariff relief, that revenue shortfall is typically recouped from other businesses and households.”
For this reason, he said it is critical that all energy users review the NERSA consultation paper and submit comments before the deadline.
The public participation process concludes on 21 January 2026.
A final decision by the regulator is expected by 30 January 2026, with approved adjustments likely to take effect on 1 April 2026 for direct Eskom customers and 1 July 2026 for municipal customers.
The consultation paper can be found below:
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