Huge 13% Eskom price hike approved for 2025

The national energy regulator Nersa has approved a 12.7% increase for Eskom electricity tariffs in 2025, which will come into effect from 1 April 2025.

The regulator announced the approval at a meeting on Thursday. It also approved a 5.36% tariff hike for 2026 and 6.19% for 2027.

The approved price hikes are far above inflation, currently at 3%, averaging 4.5% in 2024.

The approved hikes are lower than what Eskom was seeking and applied for as part of the Multi-Year Price Determination application (MYPD6) period.

In September 2024, Eskom officially tabled its MYPD6 for 2025, 2026, and 2027, seeking an effective 66% tariff hike over the period—the bulk of which would have been for 2025.

However, the hikes were cut short by the regulator. Nersa has historically only given Eskom around 55% of its applied hikes.

For 2025, it cut Eskom’s application down by 65% (ie, only 35% of the application).

The approved tariff hikes are as follows:

Contrary to the energy regulator’s stated intent to be fully transparent and open with its committee and subcommittee meetings, Nersa has kept the recommended tariff hikes hidden from the public throughout the process.

In March 2024, the regulator published a statement saying that matters of public importance—including the tariff recommendations and specific percentages—would be revealed during publicly broadcast committee meetings.

However, this did not happen, with the regulator opting to hide these from public scrutiny during meetings.

Backlash

Even though the Nersa-approved tariff hikes are lower than what Eskom applied for, they still represent a significant jump in prices for businesses, communities and households.

The group has faced significant backlash from the public over the hikes. The increases have been called untenable and unsustainable and directly contributing to a cost-of-living crisis in the country.

Affordability emerged as the biggest concern among stakeholders during public hearings, Nersa said.

For consumers, Eskom’s price hikes would have often led to a choice between food or electricity, the regulator said. Businesses meanwhile, said they would be forced to close their doors.

Energy minister Kgosientsho Ramokgopa has also repeatedly spoken out against the tariff hikes, promising government intervention.

So far, the promised interventions seem focused on lower-income households and longer-term processes.

For the former, the minister said that the government is looking at expanding its Free Basic Electricity (FBE) policy, boosting free usage from 50 kWh to 150-200 kWh.

Over the longer term, the minister argued that improving Eskom’s finances, particularly with the R250 billion aid from the government to handle its debt, will improve the utility’s credit standing, leading to easier access to financing.

“Lower financing costs directly translate to the containment of Eskom’s cost-reflective tariff, ensuring prices remain within the affordability of end customers,” he said.

Unfortunately, neither of these interventions directly deals with one of the biggest crises at the heart of the escalation in price hikes: municipal debt.

Eskom itself has warned that if municipal debt is not dealt with—that is, municipalities failing to pay for the electricity they use—then the burden will continue to fall on customers who do pay.

Reporting its annual financial results in December, the group remarked that municipal debt was heading toward R110 billion in 2025.

However, the Auditor General this week pointed out that Eskom’s strategy of hiking prices to cover its revenue shortfalls is unlikely to yield the expected results.

This is primarily because higher prices would likely push electricity users to illicit means of getting power. Ramokgopa also warned that the unchecked hikes could lead to social unrest.