South African consumers should brace for higher-than-expected electricity price increases in 2026 and 2027 following the National Energy Regulator of South Africa (NERSA)’s admission of a critical error in its tariff calculations.
Earlier this year, NERSA approved Eskom’s electricity price increases for 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 requirements.
Original vs Revised Increases
Initially, NERSA had approved the following electricity tariff hikes:
- 2025/26: 12.74%
- 2026/27: 5.36%
- 2027/28: 6.19%
However, following a judicial review application by Eskom, which identified a R107 billion revenue shortfall, NERSA reassessed the figures and acknowledged a R54 billion shortfall over the three-year period, largely due to the depreciation miscalculation and improper handling of asset rollovers.
Revised Price Hikes
As part of a settlement agreement – which still awaits court confirmation – NERSA has now agreed to phased additional increases to cover the shortfall:
- 2026/27: +3.40 percentage points → New increase: 8.76%
- 2027/28: +2.64 percentage points → New increase: 8.83%
The remaining balance from the R54 billion shortfall will be recovered during the next MYPD cycle.
Consumer Impact and Inflation Concerns
While the current financial year (2025/26) will remain unaffected, the updated increases for 2026 and 2027 will further strain already burdened households.
With inflation expected to average 3.5% in 2025, these electricity price hikes far exceed inflation and could trigger further inflationary pressures.
Analysts warn that this could complicate the South African Reserve Bank’s efforts to maintain its inflation target of 3%, especially in a climate where high living costs are already impacting consumer confidence and spending.
NERSA said the phased implementation aims to prevent sudden tariff shocks while ensuring Eskom’s financial sustainability.
However, critics argue the additional burden reflects systemic inefficiencies and poor regulatory oversight that ultimately impact the consumer.
How much do you currently spend on average per month on electricity?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1
Subscribe to The South African website’s newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
