Eskom electricity price pain coming for South Africa

The National Energy Regulator of South Africa (NERSA) has published a consultation paper to finalise Eskom’s approved 8.83% tariff increase and adjustments to fixed charges for the 2027/28 financial year.

While the Eskom Retail Tariff Structural Adjustment (ERTSA) lists an 8.84% increase for municipal customers and an 8.83% increase for Eskom Direct customers, these are averages.

Specifically, the average Eskom Direct tariff increase obscures a significant increase in fixed charges. Eskom introduced these charges to separate the costs of operating its fixed infrastructure.

Eskom has been implementing these fixed fees over a three-year glide path. Currently, they are at 66.6% of the final amount Eskom wants to charge. Next year, they will increase to 100%.

The more painful change is Eskom’s separate service and administration charge, which jumps by almost 50%.

That translates to a 20.1% increase on Eskom’s Homepower 1 tariff and a 23.3% increase for those on its most popular Homepower 4 tariff plan.

When these tariff changes kick in on 1 April 2027, people on the Eskom Homepower 4 tariff plan will pay R670 per month before consuming a single kilowatt-hour of electricity.

News for municipal customers is slightly better. It explained that, for FY2028, the Generation Capacity Charge (GCC) must reach 30% of the benchmark value set in its FY2025 Retail Tariff Plan.

Since the GCC for municipal customers is already at 30% of the benchmark, no further adjustment is necessary for next year.

Instead, these fixed fees are to increase by the 8.84% average tariff adjustment already approved for people supplied by municipalities.

The table below summarises the current fixed charges that Eskom Direct customers pay and the proposed increase to their fixed fees for next year.

TariffCurrent fixed/day2027/28 fixed/dayIncreaseFixed cost/monthHomepower/Homeflex 1R23.02R27.6520.1%R841Homepower/Homeflex 2R42.68R49.0514.9%R1,492Homepower/Homeflex 3R84.33R94.3811.9%R2,871Homepower/Homeflex 4R17.86R22.0323.3%R670

NERSA requested public comment on Eskom tariff adjustments

NERSA has invited the public and stakeholders to provide written comments on the ERTSA. The closing date for the comments is 2 October 2026 at 16:00.

It should be noted that the public consultation is not about Eskom’s already-approved revenue, but about whether Eskom’s proposed structure correctly and fairly recovers that revenue.

The underlying revenue determination is already done, and what is at stake is who pays how much, through which tariff components.

NERSA first uses the Multi-Year Price Determination (MYPD) process to decide Eskom’s allowable revenue. For 2027/28, the resulting numbers are:

• Allowable revenue: R419.438 billion
• Forecast sales: 160,395GWh

ERTSA then translates that revenue requirement into Eskom’s individual retail tariffs and its schedule of standard prices and charges. NERSA specifically wants submissions about:

• Whether the 8.83% average increase has been applied correctly and reasonably across customer categories;
• The use of the approved sales forecast and allowable revenue;
• The implementation of the third year of Eskom’s Retail Tariff Plan (RTP);
• Whether the resulting tariffs actually recover the approved revenue without inappropriate over- or under-recovery;
• The effects on different customers and affordability;
• Whether the tariff structure is sufficiently cost-reflective; and
• Broader effects on competition and South Africa’s emerging wholesale electricity market

NERSA said it would specifically consider fixed charges, the Generation Capacity Charge, and legacy charges and stranded assets.

This included the effects of these aspects on customer behaviour, switching, investment and competition.

NERSA also said it would consider findings from its electricity market inquiry and whether the tariff design could perpetuate structural problems as South Africa moves towards a wholesale market.