South African households and businesses are set to face significantly higher electricity price increases in 2026 and 2027 than initially announced, following a major regulatory error and a subsequent court settlement between the National Energy Regulator of South Africa (NERSA) and Eskom.
The new increases will see tariffs jump to 8.76% in 2026 and 8.83% in 2027. This is a sharp rise from the 5.36% and 6.19% hikes NERSA originally approved for those years in its multi-year price determination (MYPD) announced in January.
The adjustment comes after NERSA admitted to a significant miscalculation in its revenue determination for Eskom. The regulator omitted certain figures related to Eskom’s generation business, creating a substantial shortfall.
To resolve the issue, which Eskom had challenged through a judicial review, the two parties reached a settlement. NERSA has agreed to grant Eskom an additional R54 billion over three years, on top of the R1.2 trillion it had already approved.
Eskom had initially argued the regulator’s error amounted to a R107 billion shortfall and had offered to settle for R62 billion. However, NERSA’s own internal review concluded the accurate figure was R54 billion.
In an interview with SABC’s Morning Live, NERSA’s Executive Manager for Electricity, Rhulani Mathebula, confirmed the details and defended the process.
“This is not necessarily a new determination. It was just a correction on the omission that we had actually done,” Mathebula stated. He explained that if the error had not been made, the original January announcement would have contained the higher percentages.
The settlement has raised serious concerns about transparency and the burden on consumers, who are already grappling with exorbitant electricity costs and persistent load-shedding.
When challenged on why the public was not consulted on a decision that directly impacts their finances, Mathebula argued that the judicial review process did not require public consultation. He stated that the settlement needed to be made an order of court before it could be communicated, hence the recent announcement.
The interviewer pressed Mathebula on whether consumers are effectively being forced to pay for Eskom’s historical mismanagement, corruption, and cost overruns, such as those at the Medupi and Kusile power plants.
Mathebula defended NERSA’s role, stating it conducts a “prudent and rigorous assessment” of Eskom’s application to disallow unjustified costs.
“We do not pass through to consumers costs that are unjustified… This is due to your own mismanagement,” he said, though he did not provide specific examples when asked. He emphasized that the regulator must balance protecting consumers with ensuring Eskom remains a going concern.
The admission of the error and the opaque settlement process is likely to intensify public frustration over the rising cost of electricity and the perceived failures of both Eskom and its regulator.