Major electricity pain for households in South Africa coming next month
The National Energy Regulator of South Africa has confirmed Eskom’s massive price increases for 2026, with an almost triple-inflation tariff hike of 8.8% kicking in from 1 April.
The energy regulator gave its final approval for the Eskom Retail Tariffs and Structural Adjustment (ERTSA) application, which was submitted in February.
The application outlines Eskom’s final pricing for the year. Nersa considered and approved an average tariff increase of 8.76% for Eskom direct customers and 9.01% for municipalities.
Inflation for the start of the year is around 3.5%.
The approved standard tariff increase of 8.76% will be implemented from 1 April 2026 until 31 March 2027 for Eskom direct customers, and the 9.01% increase will be implemented from 1 July 2026 until 30 June 2027 for municipal customers.
“This difference in percentages is brought about by the differences in implementation dates between Eskom direct customers and municipalities buying from Eskom,” Nersa said.
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.
Nersa determines Eskom’s allowed revenue for a defined period through the Multi-Year Price Determination (MYPD) framework.
The annual allowed revenue for each year of the MYPD period is determined based on the projected average energy demand.
As part of this process, Eskom must submit an annual ERTSA application to Nersa for approval, detailing how the approved revenue will be distributed across various customer categories.
The approval process took place over a truncated period due to a court order on December 21 requiring Nersa to conduct public consultation on an adjustment to the allowable revenue after the regulator’s calculation errors.
This resulted in Eskom being allowed to collect an additional R54.7 billion from customers, split over three years.
The first tranche of R12 billion is to be paid through higher tariffs in 2026, bringing the average increase up from an initial 5.4% to 8.8%.
A further R23 billion will be paid in 2027, with price hikes jumping from the original 6.2% to 8.8%.
The balance of R19.7 billion will be recovered through future price applications by Eskom in the next wave of hikes.
The consultation on the revised amounts has not resulted in any changes.
“Nersa’s decision has taken into consideration the comments raised by stakeholders, which include concerns about the impact of tariff increases on electricity consumers,” it said.
“The comments by stakeholders will be published together with the Reasons for Decision document in due course.”
Price hikes will be even bigger
While Nersa has approved an official tariff increase, consumers can expect to pay even more for electricity in the coming months as other Eskom changes take effect.
Most notably, Eskom’s ERTSA explicitly states that the approved tariffs are before any fixed charges are applied.
These charges will increase in 2026, meaning households will pay even more than the 9% base price hikes in April.
Under Eskom’s new Retail Tariff Plan (RTP), approved by Nersa in 2025, the utility was given the green light to apply new time-of-use charges, fixed capacity charges, and network and service charges.
Nersa approved changes to fixed charges on electricity bills, with the caveat that they be introduced over three years.
For FY25/26, the fixed Generation Capacity Charge (GCC) allocation was reduced to 20% of the applied-for level, rising to 30% of the proposed levels in year 2 (FY26/27) and year 3 (FY27/28).
In the latest ERTSA, Eskom noted that the fixed portion of the GCC is increased from 20% in FY25/26 to 30% in FY26/27. The remaining 70% is included and recovered through the energy charge.
Similarly, service and administration charges for other tariffs are also being phased in over three years.
The fixed portion of this charge increased from 33.33% in FY25/26 to 66.66% in FY26/27. The remaining 33.34% of the service and admin charge is included and recovered through the energy charge.
“After updating the tariffs with the applied-for FY26/27 tariff increases, the rate changes required by Nersa’s RTP decision for FY26/27 are included,” Eskom said.
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