The National Energy Regulator of South Africa (NERSA) has approved a higher 8.76% electricity price hike in April this year, followed by another 8.83% increase in April 2027.
The tariff increases now approved by NERSA will see higher electricity price hikes effective from April 2026 and again in April 2027.
This reflects a redetermination of Eskom’s price increases for the next two years, which were initially set at 5.36% for 2026/27 and a further increase of 6.19% for the 2027/28 financial year.
“The redetermination follows a High Court judgment (in December last year), which remitted NERSA’s decision on Eskom’s Generation Regulatory Asset Base for 2025/26, 2026/27 and 2027/28 for redetermination.
“The redetermination was conducted using the approved MYPD4 (Multi-Year Price Determination] Methodology, following a public consultation process in line with the court judgement.
“This process entailed NERSA undertaking a detailed, component-by-component recalculation of Eskom’s Generation RAB, using the same information originally submitted by Eskom in its MYPD6 application and applying the approved methodology strictly,” NERSA said in a statement.
The total additional revenue for Eskom will be implemented in phases.
“The phased approach limits additional price impacts to single digit increases in 2026/27 and 2027/28, and avoids any retrospective adjustment for 2025/26, in line with the court judgment. It further reduces tariff volatility and the risk of eroding demand (with a view to) balancing Eskom’s financial sustainability with customer affordability. No retrospective tariff increases were applied.
“The re-determination is consistent with the statutory tariff principles, which require tariffs that enable an efficient licensee to recover the full cost of licensed activities, including a reasonable return.
“NERSA’s adopted a Weighted Average Cost of Capital (WACC) and phased recovery approach which ensures Eskom receives a reasonable, cost-reflective return while mitigating immediate tariff shocks. NERSA remains committed to transparent, fair, and independent regulation in the public interest,” the statement read.
For more information visit:www.sanews.gov.za
