Eskom tables massive 2025 electricity price hike for South Africa

The National Energy Regulator of South Africa (Nersa) has published Eskom’s Multi-Year Price Determination (MYPD) 6 revenue application for the group’s next three financial years.

Eskom is applying for hundreds of billions of rands in revenue for the periods, which will translate to massive tarrif increases for electricity.

It wants R446 billion for FY2026, R495 billion for FY2027, and R537 billion for FY2028.

This translates to price increases for Eskom direct customers at

• 36.15% from 1 April 2025 to 31 March 2026
• 11.81% from 1 April 2026 to 31 March 20227 and
• 9.10% from 1 April 2027 to 31 March 2028

This is in line with the earlier leaks of Eskom’s proposed application.

Nersa will consult with stakeholders on Eskom’s revenue application, as part of its decision-making process. The regulator has in the past granted tariff increases much lower than Eskom’s application, but was unable to spare the country from double-digit hikes in the past two years.

Eskom said it follows the Multi-Year Price Determination (MYPD) methodology as prescribed by Nersa to determine its applications.

“Nersa will make the decision on the revenue Eskom can receive following its own analysis, and the regulator will conduct a series of public consultations. This application allows for an improvement in the financial sustainability of Eskom through the migration to cost-reflective prices,” Eskom said.

“This in turn significantly contributes to the successful operation of Generation, Transmission (NTCSA) and Distribution in Eskom. Further migration towards cost reflectivity to cover the full cost of capital would be considered in subsequent applications. This would minimise the impact on the taxpayers.”

Eskom can only implement tariff decisions made by Nersa, it said.

Notably, the proposed increases do not include the additional amounts that energy regulator Nersa will allow the utility to ‘claw back’ from the Regulatory Clearing Account (RCA).

Nersa announced in August that Eskom would be allowed to recover over R8 billion through the RCA from the 2021/22 financial year.

Eskom applied for an RCA of R23.9 billion for the year, but the regulator approved just under R8.1 billion, adjusting R15.8 billion out of the application.

The RCA is an account in South Africa’s current electricity tariff methodology that contains a balance between the actuals for Eskom’s full financial year and what Nersa allowed for that year. It is one of the key drivers of monumental tariff hikes.

Nersa is working on new methodology to remove the RCA, which it said has been open to and indeed abused over the years.

In addition to the MYPD 6 application, Eskom has submitted a retail tariff plan (RTP) to Nersa outlining proposed structural changes, which are expected to be implemented from 1 April 2025 once all approval and governance processes are concluded.

“The RTP aims to introduce cost-representative pricing that supports the long-term sustainability of all participants in the electricity supply industry,” it said.

Eskom is currently facing massive backlash over its proposed tariff hikes, with politicians across all party lines opposing three more years of double-digit price hikes.

Minister of Energy and Electricity Kgosientsho Ramokgopa has called the price hikes – including the proposed 36% hike for 2025 – a growing crisis, and that the government would be looking for a way to mitigate this.

In July, he said the rate at which Eskom tariffs and municipal tariffs are increasing is unsustainable, describing it as “an untenable situation”.

“We are getting to a situation where your lower-to middle class – even your public servants – can no longer afford the cost of electricity in this country,” he said.

“So as we speak now, it’s an affordability question; over a period of time, if you don’t address it, it’s a national security problem. Because people are ‘not going to just fold their arms’.”

Higher electricity prices also have inflationary pressure, which impacts the cost of goods and the cost of doing business.

“This is a problem that is likely to become acute over a period of time, and needs to be addressed urgently,” he said.

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