Eskom’s Latest Price Hike Could Leave South Africans Paying Much More

South Africans have been given four weeks to comment on Eskom’s proposed 8.83% electricity price increase for 2027.

The National Energy Regulator of South Africa (Nersa) gazetted the proposed increase on Wednesday, opening a public participation process that will allow consumers and other stakeholders to submit their views before a final decision is made.

Written submissions close at 4pm on October 2, while a public hearing is scheduled for October 8. Nersa is expected to announce its final decision on November 26.

If approved, the increase will take effect from April 1, 2027 for customers supplied directly by Eskom. Municipal customers would face an 8.84% increase from July 1, 2027.

The average electricity price would increase from 240.28c to 261.50c per unit, an increase of 21.22c.

Why Is Eskom Asking For Another Increase?

The proposed increase follows a Nersa decision earlier this year after the regulator acknowledged that it had miscalculated the value of Eskom’s generation assets.

The error resulted in Eskom being allowed to recover an additional R23.013 billion for that year, increasing its approved revenue from R396.425 billion to R419.438 billion.

Energy expert Dr Kelvin Kemm, chair of Pretoria-based nuclear development company Stratek Global, said South Africans could not afford another increase.

Kemm argued that electricity prices should instead be reduced, saying repeatedly increasing tariffs when electricity sales decline places an additional burden on consumers.

Nersa has said it cannot reconsider the amount of revenue already approved for Eskom as part of this process. Instead, it will assess whether Eskom’s proposed price schedule recovers the approved revenue appropriately and fairly.

How Much More Could Households Pay?

Eskom’s application shows that households using certain prepaid tariffs could see significant increases from April 2027.

A household on the Homelight 20A prepaid tariff purchasing 350 units a month would pay approximately R895, compared with R823 currently.

For households purchasing 150 units, the monthly cost would rise from R353 to R384.

On the Homelight 60A tariff, 350 units would cost approximately R1,138, up from R1,046.

Homelight is Eskom’s subsidised tariff for qualifying low-income households supplied directly by the utility.

The government’s 50 units of free basic electricity for qualifying households would be worth about R128 a month on the Homelight 20A tariff under the proposed pricing.

‘Here We Go Again’

Independent analyst Dr Dale McKinley criticised the proposed increase, particularly given Eskom’s recent reports of improved financial performance.

McKinley questioned why consumers should face higher electricity costs while Eskom is reporting record profits.

He also warned that rising energy costs were placing further pressure on South Africans already dealing with difficult economic conditions.

Eskom’s Changing Tariff Structure

The application also marks the completion of a three-year restructuring of Eskom’s residential tariffs, shifting some costs away from the electricity price per unit and towards fixed charges.

Eskom expects to collect about R355 million from residential service charges next year, up from R261 million, while revenue from energy rates is expected to fall from R3.779 billion to approximately R3.66 billion.

Eskom said higher service charges were necessary to make its tariffs more reflective of the underlying cost of supplying electricity.

According to Eskom’s calculations, the effective increase for Homepower customers would be about 8.24%, below the headline 8.83% figure, because lower energy rates would offset some of the impact of higher fixed charges.

Public Consultation Underway

Nersa previously approved Eskom revenue increases of 12.74% for 2025, 5.36% for 2026 and 6.19% for 2027.

The latest process follows a lengthy legal dispute over Eskom’s allowable revenue and Nersa’s calculations.

AfriForum and the Minerals Council South Africa previously challenged a settlement between Eskom and Nersa, resulting in the Pretoria High Court sending the matter back for a fresh determination involving public consultation.

Nersa subsequently determined an additional R54.734 billion for Eskom and published its reasons for the decision in July.

Consumers and other interested parties now have until October 2 to submit their views on Eskom’s proposed 2027 tariff increase.