Revised Tariff Increases Announced
The National Energy Regulator of South Africa (NERSA) has officially approved significant electricity tariff increases for state-owned power utility Eskom. Consumers will face an 8.76% increase effective April 1, 2026, followed by an additional 8.83% increase from April 1, 2027. These adjustments will apply to Eskom's direct customers, while municipal customers will see the increases implemented from July 1, 2026, and July 1, 2027, respectively.
These new percentages supersede previously approved lower increases of 5.36% for the 2026/27 financial year and 6.19% for the 2027/28 financial year.
Reasons Behind the Adjustment
The decision to implement higher tariffs stems from a High Court judgment delivered in December, which mandated NERSA to re-determine its earlier tariff decisions for the 2025/26, 2026/27, and 2027/28 financial years. NERSA acknowledged errors in its initial calculations and is now allowing Eskom to recover an additional R54.7 billion over three years. According to NERSA, the re-determination aims to 'ensure regulatory certainty, the financial sustainability of electricity supply, and the protection of consumers from undue tariff volatility.' The regulator stated that the decision is consistent with statutory tariff principles requiring tariffs that enable an efficient licensee to recover the full cost of licensed activities, including a reasonable return.
Impact on Consumers and Economy
The approved tariff hikes are expected to place additional financial strain on South African households and businesses. Energy analysts have warned that such increases could lead to a rise in electricity theft and non-payment by consumers and municipalities, potentially exacerbating Eskom's arrears. Furthermore, the higher power costs are anticipated to have broader economic impacts, including on industrial electricity consumers, and could prompt some businesses and individuals to seek alternative energy sources or move off the national grid.
Public and Stakeholder Reactions
The announcement has drawn criticism from various stakeholders, including local governments and consumer advocates. Concerns have been raised about the affordability of these increases, which have consistently outpaced inflation in recent years. NERSA's public hearings on Eskom's tariff proposals reportedly garnered 'an overwhelming level of interest from the public,' highlighting widespread frustration over the rising cost of electricity.
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