Eskom gets massive electricity price hike

The National Energy Regulator of South Africa (Nersa) has approved a 12.7% Eskom electricity tariff hike for the 2025/26 financial year, effective from 1 April 2025.

The state-owned power utility asked the regulator for a 36.15% electricity tariff adjustment for the coming financial year in its tariff application.

Nersa also approved a 5.36% increase for the 2026/27 financial year and a 6.19% increase for 2027/28.

The effective increase is 26.09% over three years, a significant reduction from the 66% increase for which Eskom had applied.

Eskom will be allowed to collect revenues of R384 billion for the 2025/26 financial year, R409 billion for 2026/27, and R435 billion for 2027/28.

Nersa’s decision-making process considered affordability for vulnerable sectors such as indigent customers and some industrial sectors.

It also took into account submissions from its stakeholders.

“We received various inputs from the stakeholders who came to our presentations. Top of the list of concerns was the affordability of electricity if the prices applied for by Eskom are approved,” said Nersa chairperson Thembani Bukula.

Eskom submitted its tariff adjustment application to Nersa in late August 2024.

In addition to the 36.15% increase requested from 1 April 2025, Eskom wanted an 11.81% increase from 1 April 2026, and a 9.10% increase from 1 April 2027.

“Eskom is making a total revenue application of R446 billion, R495 billion, and R537 billion for FY2026, FY2027, and FY2028, respectively,” it said in the application.

“This includes RCA and court outcome decisions.”

In its application, the state-owned power utility also asked for a 43.55% increase for customers supplied by municipal power utilities in 2025/26, followed by a 3.36% increase in 2026/27 and 11.07% in 2027/28.

The adjustments Nersa approves for municipal customers take effect on 1 July each year.

Eskom said the delayed implementation of South Africa’s renewable energy programme put it under pressure to increase its generation capacity, necessitating the hefty increases.

According to the utility, South Africa failed to generate over 8,000MW of solar and wind energy between 2019 and 2023, as projected in the 2019 Integrated Resource Plan.

As a result, its coal-fired stations have to fill in the generation gap.

Eskom chief financial officer Calib Cassim urged stakeholders to get involved in Nersa’s consultation process and said the power utility had based its application on the costs it would incur to provide electricity to South African residents.

“It is a critical component in ensuring Eskom continues to provide reliable electricity services while improving its financial sustainability,” he added.