South African consumers may face steeper electricity price hikes in 2026 and 2027 after the National Energy Regulator of South Africa (NERSA) acknowledged a critical error in its tariff calculations.
Earlier this year, NERSA approved Eskom’s electricity price increases under the Sixth Multi-Year Price Determination (MYPD6) cycle. However, a data input error affecting depreciation and the Regulatory Asset Base (RAB) led to a significant underestimation of the power utility’s revenue needs.
Originally, approved tariff hikes were:
- 2025/26: 12.74%
- 2026/27: 5.36%
- 2027/28: 6.19%
Following a judicial review application by Eskom, which highlighted a R107 billion revenue shortfall, NERSA reassessed its calculations. The regulator admitted a R54 billion shortfall over the three-year period, largely due to depreciation miscalculations and improper handling of asset rollovers.
Under a proposed settlement agreement, pending court confirmation, NERSA plans phased additional increases:
- 2026/27: +3.40 percentage points, bringing the new increase to 8.76%
- 2027/28: +2.64 percentage points, bringing the new increase to 8.83%
The remaining shortfall is expected to be addressed in the next MYPD cycle.
While the 2025/26 financial year remains unaffected, the revised increases will place extra pressure on households already struggling with high living costs. Analysts warn that these hikes, surpassing expected inflation of 3.5% in 2025, could complicate the South African Reserve Bank’s efforts to maintain its 3% inflation target and dampen consumer confidence.
NERSA maintains that the phased approach is designed to prevent sudden tariff shocks while ensuring Eskom’s financial sustainability. Critics, however, say the additional burden exposes systemic inefficiencies and regulatory oversights that ultimately impact consumers.
