Eskom Electricity Tariff Hike: Nersa Consults on Proposed 8.8% Increase for 2027

JOHANNESBURG, Gauteng — South African consumers are bracing for another above-inflation Eskom electricity tariff hike, as the National Energy Regulator of South Africa (NERSA) begins consulting on a proposed average increase of 8.8% effective April 2027. The adjustment forms part of the utility’s multi-year price determination, raising concerns about the ongoing financial strain on households and businesses already grappling with severe cost-of-living pressures.

Rhulani Mathebula, Nersa’s Electricity Regulation Executive Manager, confirmed that the regulator is currently reviewing the third year of Eskom’s multi-year price determination (MYPD6), which was initially finalized in January 2025. Mathebula noted that stakeholders are being invited to provide formal input on how Eskom structures its charges—specifically the breakdown of basic charges, service charges, and actual energy usage—for the 2027/28 financial year.

Mathebula emphasized that the consultation process is fundamentally designed to protect consumers from unfair billing practices. “When you pay for electricity, there are certain components in your pricing that include basic charges, service charges, and the energy that you use,” Mathebula explained. He added that Nersa’s role is to ensure the proposed structure does not result in double counting or force consumers to pay for services they were never supposed to be charged for, acknowledging that stakeholders have historically expressed dissatisfaction with the introduction of new fixed charges in previous years.

Highlighting the regulator’s active pushback against excessive billing, Mathebula revealed that if Eskom had its way, the tariff increase could have been upwards of 16%. However, the regulator disallowed billions of rand in requested amounts, citing that certain costs were not necessarily the result of prudent operation by the utility.

To unpack the implications for cash-strapped consumers, Power and Energy Expert Professor Vally Padayachee clarified that the current application is not a newly requested hike, but rather the scheduled implementation of percentages already approved. Under the MYPD6 process, Nersa approved an 8.83% increase for Eskom’s direct customers and an 8.84% increase for municipalities for the 2027/28 financial year.

Addressing the paradox of rising tariffs alongside Eskom’s recently reported improvements in generation performance and profitability, Professor Padayachee explained that the utility and municipalities are still playing “catch-up.” He noted that the public sector entities did not enjoy cost-reflective tariffs for approximately two decades. “The tariff increases you’ve seen lately are due to that catch-up process, plus there are inefficiencies in the business,” Padayachee stated, adding that while high prices may persist for a few more years, the upward trend is expected to eventually decrease.

Professor Padayachee stressed that tariff applications are fundamentally predicated on a business’s cost drivers, which remain significant for both Eskom and local municipalities. He expressed hope that the newly amended electricity pricing policy, which has been released for public comment, will help drive down these costs and force a sharper focus on operational efficiencies.

Furthermore, Padayachee warned that persistently high tariffs are having a practical, measurable impact on consumer behavior, actively driving more households and businesses toward alternative energy sources. He pointed to the existing 8,000 megawatts of rooftop solar capacity already installed in the country, arguing that a primary motivator for consumers choosing to move off the grid is the pursuit of cheaper, more predictable electricity.

As the consultation period unfolds, the central question remains whether Eskom can maintain its financial sustainability without making electricity increasingly unaffordable for the majority of South Africans.