Big Eskom tariff increases hitting soon

·18 Mar 2025

Energy regulator Nersa has officially approved the Eskom Retail Tariffs and Structural Adjustment (ERTSA) for 2025, which will see prices increased by 12.74% from 1 April 2025.

The regulator has also approved the municipal tariff increase, which will see prices going up by at least 11.32% from 1 July 2025 for municipal customers.

The difference in percentage is due to the different implementation dates of Eskom direct customers and municipalities buying from Eskom.

According to the ERTSA methodology, Eskom must recover the full allowed revenue within its financial year, which is from April to March. However, the municipal financial year is from July to June.

The municipal rates are also subject to change, depending on the additional values municipalities may place on the increases when determining their budgets.

The approved rates for Eskom come after the regulator approved the group’s MYPD6 application for the next three years.

This will see prices increased by:

12.74% in 2025
5.36% in 2026
6.19% in 2027

Notably, these price increases do not factor in Eskom’s new Retail Tariff Plan (RTP), which will see a host of other changes take effect that may push prices up even higher.

The changes to the RTP will see Eskom get rid of the incline block tariff (IBT), introduce new time of use tariffs, and add non-generation service charges to monthly bills.

According to analysts, this will have the net effect of increasing monthly costs far above the Nersa-approved rates, depending on the package and amount of electricity used.

Under the new structure, all Eskom customers will be hit with fixed non-generation costs relating to transmission, distribution and consumer account administration.

Nersa has only allowed Eskom to implement 20% of the rates originally contained in its application, with 30% following in 2026 and again in 2027.

Even with this staggered implementation, tariffs will be going up significantly.

Notably, the Nersa-approved rates are calculated at 15%. From 1 May 2025, VAT in South Africa will be going up by an additional 0.5 percentage points, meaning the tariff hikes will be even higher.

The same will follow for 2026, barring any intervention from Parliament when passing or not passing the budget.

This means tariffs in 2026 could potentially increase by 5.4%, with the new tariff structure implemented at 50% and a 16% VAT applied.