Eskom Requests A 36.15% Increase in Electricity Prices For The Year 25/26

A 2023 protest against high priced, unreliable electricity in Johannesburg, South Africa.

According to media reports, the Energy Regulatory Commission of South Africa's National Energy Regulatory Agency (Nersa) has approved Eskom's application for a 12.74% increase in electricity prices. The committee also approved Eskom to increase electricity prices by 5.36% and 6.19% in the 2026/27 and 2027/28 fiscal years, respectively. This decision is lower than the 11.8% and 9.1% increase requirements proposed by Eskom in its sixth Multi Year Price Determination (MYPD6) application, respectively. The direct customer electricity price will take effect on April 1, 2025, while the municipal electricity price will take effect on July 1, 2025.

The electricity price increase for the fiscal year 2025/26 is much lower than the 36.15% requested by Eskom, but still higher than the inflation linked increase requirements put forward by many stakeholders at public hearings in November and December. The consumer inflation rate in December was 3%, while the annual average inflation rate was 4.4%, lower than the average level of 6% in 2023. In addition, Nersa is also facing certain political pressure to control the increase in electricity prices. Previously, South African Minister of Electricity and Energy Kgosientsho Ramokgopa stated that Eskom's 36.15% increase request was unacceptable and unsustainable.

Minister Ramokgopa welcomed this decision in a statement, while acknowledging that it will put pressure on Eskom. He stated that the government remains committed to working with Eskom to promote higher efficiency improvements. However, Ramokgopa believes that the approved electricity price adjustment takes into account the need to alleviate inflationary pressures on communities and businesses. The South African government will introduce other measures to support impoverished consumers and small businesses, but has not provided specific details.

A 2023 protest against electricity prices hikes.

Nersa Board Chairman Thembani Bukula described the complexity of the decision-making process as a 'delicate balancing act' that takes into account the needs of all stakeholders. He stated that Nersa needs to ensure that Eskom can sustainably develop in both the short and long term. At the same time, ensure that the electricity services provided by Eskom are priced reasonably. This is not an easy task. Because inevitably, it is not only influenced by our methods and rules, but also by the larger economic environment at home and abroad. We are still guided and constrained by national policies and legislation.

In 2024, Eskom applied to Nersa for a 36% increase in the fiscal year 2025/26, an 11.81% increase in the fiscal year 2026/27, and a 9.1% increase in the fiscal year 2027/28. This proposal has sparked strong protests from the public and businesses, with many believing that the price increase is unbearable.

Bukula emphasized that regulatory agencies have taken extensive measures to ensure that the public participation opinions of all stakeholders are taken into account. The regulatory authorities held stakeholder meetings and public hearings, and accepted written opinions. Family users emphasize that if these prices are approved, they will have to make a choice between buying food and buying electricity. On the other hand, companies have explicitly stated that if these price increases are approved, many of them will be forced to shut down their businesses.