Bad news for Eskom customers now official
South Africa’s energy regulator has allowed state-owned Eskom to raise tariffs and recover R54.7 billion over three years after a series of pricing errors and a failed attempt to settle the matter privately.
The National Energy Regulator of South Africa said Eskom can increase electricity tariffs by as much as 8.3% a year through the 2028 financial year, according to a statement issued Sunday.
Initially, when Nersa announced Eskom’s tariff increases for 2026/27 and 2027/28, the increases were set at 5.4% and 6.2%, respectively.
The decision follows a High Court ruling that forced the regulator to reassess Eskom’s allowable revenue and run a public participation process. Nersa determines how much the utility is permitted to charge customers for electricity.
After an initial three-year tariff determination was issued in January 2025, Eskom identified calculation errors, which the regulator acknowledged.
The two sides then agreed to a private settlement amounting to about R54 billion, according to the court judgment.
“Nersa was clearly embarrassed by its mistake,” Judge Jan Swanepoel wrote in a 21 December ruling. “Its purpose in entering into the agreement was, at least partially, to avoid public scrutiny of its error.”
The regulator later apologised for the mistake in September, saying the errors had been identified before the original determination was finalised but were not corrected before it was announced.
“The absence of any explanation as to how the compromise amount of R54 billion was arrived at leaves one with the uncomfortable feeling that the compromise was little more than a thumb-suck,” Swanepoel wrote.
The episode has renewed scrutiny of Nersa at a time when electricity prices have surged, and the government has pledged to rein in tariffs. Thousands of jobs are at risk as higher power costs render industrial smelters unprofitable.
The revised determination adds to an eightfold increase in South African electricity prices since 2008, according to the Energy Intensive Users Group. Its members, including Anglo American Plc and Glencore Plc, account for about 40% of national electricity consumption.
The additional revenue will be recovered in phases, with about R12 billion implemented this year. No retrospective tariff increases were applied, Nersa said.
The approach “reduces tariff volatility and demand erosion risk, and balances Eskom’s financial sustainability with customer affordability,” the regulator said.
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