Social unrest warning over Eskom price hikes in South Africa

The City of Joburg’s power utility, City Power, has recommended that energy regulator Nersa cap Eskom’s price hike applications for the next three years at 11%. Anything more than this will crush consumers and possibly lead to social unrest.

The utility made its submissions to Nersa as part of the ongoing public consultations over Eskom’s MYPD6 tariff application for the next three years.

Eskom has applied for massive price hikes through 2027, which will effectively see prices climb 66% over the period.

This includes:

• 36.15% on April 1, 2025;
• 11.91% on April 1, 2026;
• 9.1% on April 1, 2027.

The application has been met with widespread backlash from municipalities, civil organisations and society at large, lamenting the impact of escalating electricity tariff increases on the cost of living.

Like many others, City Power has flagged the massive impact on households these tariff hikes carry, noting in its application that it could lead to increased poverty, unemployment and social unrest.”

“The proposed increase, which could reach an alarming 66% cumulative over the application period, will most certainly pose a significant threat to the economic stability and social fabric of the communities we serve,” it said.

“The recent implementation of a 12.75% tariff increase has already placed immense financial strain on our residents, pushing many to the brink of economic hardship. The potential for a further increase of this magnitude is not only unsustainable but also morally unacceptable.

“Such a drastic rise in electricity tariffs will exacerbate the already precarious situation faced by our residents, leading to increased poverty, unemployment, and social unrest.”

While acknowledging the pressure Eskom is under to see to its own financial shortcomings, City Power raised a point brought up by many other stakeholders at the hearings, highlighting that the national utility’s operational inefficiencies aren’t being taken into account.

As such, it has asked Nersa to cap Eskom’s price hikes at 11% for each of the application years—significantly reducing the 2025 hike, slightly reducing the 2026 hike, and slightly raising the 2027 hike.

This, the utility argued, would give Eskom above-inflation tariff hikes needed to address its finances and move towards “cost-reflective tariffs”, while also giving predictability and relief to customers.

“The proposed tariff increase structure, which suggests excessive increases in the 2025/2026 fiscal year, does not inspire the price stability and predictability that consumers require.

“An annual increase of no more than 11% should be aimed for, ensuring that Eskom can sustain itself while acknowledging the financial realities faced by consumers,” it said.

Meanwhile, it proposed that Nersa and Eskom make sure that “cost-reflexivity” in Eskom tariffs not be a moving target, saying that the national utility should improve its cost management—calling it imprudent—and better reflect all its operations and inefficiencies (such as over-reliance on using open-cycle gas turbines, slow IPP rollout and managing its carbon tax obligations).

“While we acknowledge Eskom’s need for cost-reflective tariffs, it is imperative that the national power utility also demonstrates responsibility in managing its costs efficiently,” City Power said.

“The proposed increase poses significant financial challenges to municipalities and their customers, which must be taken into consideration.”

“City Power calls upon Nersa to…towards a tariff increase that is fair, manageable, and reflective of the economic conditions facing both Eskom and its customers.

“The proposed increase must not only serve Eskom’s financial needs but also safeguard the interests of municipalities and the broader public,” it said.

Read: South Africans give Eskom’s 66% tariff hike the middle finger