The National Energy Regulator of South Africa (NERSA) has approved a moderate increase in Eskom’s electricity tariffs:

• 12,7% for 2025/6.
• 5,36% for 2026/7.
• 6,19% for 2027/8.

NERSA announced this decision on Eskom’s Multi-Year Price Determination (MYPD6) revenue application at a media briefing. In its MYPD6, the utility requested a 66% compound increase over three years:

• 36,15% in 2025/6.
• 11,81% in 2026.
• 9,10% in 2027.

“The challenge has always been the delicate balance in the often conflicting requirements of stakeholders. We must ensure that Eskom is sustainable in the long term and that electricity costs remain affordable. It is not an easy task,” said NERSA Chairperson Thembani Bukula.

Chairperson of the Electricity Subcommittee Nomfundo Maseti said: “The overall increase in tariffs proposed by Eskom would have a devastating impact on the economy and also on consumers who are vulnerable and struggling to buy basic necessities.”

The regulator made multiple adjustments to Eskom’s estimations in terms of its costs, revenue and energy efficiency. According to Maseti, NERSA adjusted Eskom’s load factor from 6% to 4%. “We have done this as a way of encouraging Eskom to operate more efficiently,” she said.

“We have also not adjusted the maintenance cost as Eskom requested. We have left it as it was.” Additionally, NERSA adjusted Eskom’s operating expenses in areas where the regulator feels Eskom could be doing better. “Eskom doesn’t deserve the figure they requested,” Maseti said.

The regulator said Eskom estimated its sales based on three scenarios: low performance, middle and high performance. “In all scenarios, certain assumptions were made but we believe the upper scenario is attainable and Eskom can increase its efficiencies and improve its sales,” said Maseti.

NERSA adjusted Eskom’s efficiency targets, saying an energy availability factor of 75% is needed and unplanned outages should not exceed 13%. This, in turn, could cause an upward trajectory in sales.

“Eskom made this request based on a decline in sales, which is not an efficient way of doing business, especially when they have requested so much capital expenditure and expenditure for coal. This is not translating to output for Eskom,” said Maseti.

NERSA allowed the capital expenditure requested by the National Transmission Company of South Africa under the condition that the regulator will continue to monitor the entity and ensure it spends efficiently and as needed.

“There was not sufficient justification for the increase given poor spending in previous years but, to ensure the stability and expansion of the network, we know that down payments need to be made,” said Maseti.

The regulator said, had Eskom been granted the tariff increase requested, the primary energy sector would have seen a productivity loss of 3,34%. With NERSA’s adjustments, this has been contained to a 1,24% decrease.

“With the adjustments we have made, we believe this will go a long way in helping consumers and we are confident that Eskom will be sustainable in the long term and able to settle its debts,” Maseti said.