The revised decision will see electricity prices rise by 8.76% in April this year and a further 8.83% in April 2027.
The move comes after a High Court order instructing the regulator to reopen its tariff determination and conduct a public‑participation process. The ruling followed objections to an agreement reached between Eskom and NERSA behind closed doors, in which the regulator accepted that it had miscalculated depreciation and the utility’s allowed return on assets in the previous multi‑year price determination. Energy Analyst Matthew Cruise, speaking to Channel Africa on Monday, unpacked the process and its implications for South Africans.
Cruise explained that Eskom originally claimed NERSA had incorrectly applied the methodology for the Multi‑Year Price Determination (MYPD 6), arguing that the regulator had under‑calculated allowable depreciation and return on asset base, a miscalculation the utility believed left it $6.10 billion short.
NERSA and Eskom then privately agreed on a revised figure of R54 billion, but the High Court ruled that such a settlement could not be finalised without proper public consultation.
According to Cruise, however, the regulator’s subsequent public‑participation process was largely superficial. “In my opinion, it was not an actual public participation process,” he said. “NERSA sent out a consultation paper on December 31, during the holiday period, asking for written input by January 21. There were no public hearings, no in‑person sessions, and no opportunity for industries or communities to provide oral submissions.”
He added that despite calling for comments on ten technical aspects of the tariff methodology, NERSA ultimately endorsed the exact same tariff increases proposed months earlier. “It feels like a tick‑box exercise. They complied procedurally, but nothing changed.”
Cruise said the approved hikes, 8.76% from 1 April and 8.83% the following year, will place further strain on households already grappling with rising costs. He noted that NERSA has also indicated that an additional $1.20 billion will be clawed back through future tariff increases that have not yet even been applied for. “Before the next tariff application has begun, they’ve already allocated roughly another 3% hike,” he said.
Cruise warned that repeated tariff hikes risk accelerating the so‑called “utility death spiral,” in which higher tariffs push large customers and middle‑income households towards alternatives such as solar and battery storage.
“Large energy users, mines, factories, big businesses, are increasingly moving to solar because it costs about half of what Eskom charges. Once they leave the grid, Eskom raises tariffs on the remaining consumers. Then households follow suit by installing rooftop solar.”
The effect, he explained, is that the customer base shrinks further, leaving poorer households and small businesses to carry the burden, an unsustainable dynamic for any utility.
Cruise said Eskom and NERSA must urgently rethink their approach if they hope to prevent a worsening financial crisis and mass grid defection.
“They need to future‑proof the system. At this rate, raising tariffs alone is not a sustainable solution.”
–ChannelAfrica–
