NERSA Approves Steeper Eskom Power Tariff Hikes for 2026 and 2027

South Africa's electricity consumers will face sharper-than-expected tariff increases over the next two years after the National Energy Regulator of South Africa (NERSA) approved revised power price hikes for Eskom, following a High Court ruling that forced the regulator to revisit its earlier decision.

NERSA has now cleared an 8.76% electricity price increase from April 2026, followed by a further 8.83% hike from April 2027, significantly higher than the earlier approved adjustments of 5.36% for 2026/27 and 6.19% for 2027/28.

Court Judgment Triggers Redetermination

The regulator said the revised decision was a "redetermination" of Eskom's tariff path, prompted by a High Court judgment delivered in December. The court had set aside NERSA's earlier ruling on Eskom's Generation Regulatory Asset Base (RAB) for the 2025/26, 2026/27 and 2027/28 periods and sent it back for reconsideration.

"The redetermination follows a High Court judgment… which remitted NERSA's decision on Eskom's Generation RAB for redetermination," the regulator said in an official statement.

Detailed Recalculation Under MYPD Methodology

NERSA said it conducted the process under its approved MYPD4 (Multi-Year Price Determination) Methodology, following a public consultation process as required by the court order.

The regulator explained that it undertook a component-by-component recalculation of Eskom's Generation RAB, using the same information Eskom originally submitted in its MYPD6 application, while applying the methodology strictly.

This recalculation resulted in higher allowable revenue for Eskom, which will now be recovered through increased tariffs.

Eskom Revenue Recovery to Be Phased In

NERSA emphasised that the additional revenue approved for Eskom will be implemented gradually rather than through immediate large adjustments.

"The phased approach limits additional price impacts to single digit increases… and avoids any retrospective adjustment for 2025/26," the regulator said.

It added that this strategy reduces tariff volatility, lowers the risk of demand erosion, and balances Eskom's financial sustainability with customer affordability.

Importantly, NERSA confirmed that no retrospective tariff increases would be applied, in line with the court judgment.

Balancing Affordability and Eskom's Financial Stability

NERSA defended the decision as consistent with statutory tariff principles, which require that tariffs enable an efficient utility to recover the full cost of licensed activities, including a reasonable return.

The regulator said its adopted Weighted Average Cost of Capital (WACC) and phased recovery approach were designed to ensure Eskom receives a cost-reflective return while mitigating immediate shocks for consumers.

"NERSA remains committed to transparent, fair, and independent regulation in the public interest," the statement said.

Higher Power Costs Ahead

The revised hikes underscore the continuing pressure on South Africa's power system, as Eskom seeks financial stability while consumers already face rising living costs and persistent electricity supply challenges.

The increases, coming into effect in April 2026 and April 2027, are expected to have wide-ranging implications for households, businesses, and the broader economy.