South Africa: Nersa Announces Electricity Price Hike

The National Energy Regulator of South Africa (NERSA) has approved an 8.76% electricity price hike in April this year, followed by an 8.83% increase in April 2027.

The move is a redetermination of Eskom's price increases for the next two years, which were initially set at 5.36% for 2026/27 and a further increase of 6.19% for the 2027/28 financial year.

"The redetermination follows a High Court judgment [in December], which remitted NERSA's decision on Eskom's Generation RAB [Regulatory Asset Base] for 2025/26, 2026/27 and 2027/28 for redetermination.

"The redetermination was conducted using the approved MYPD4 [Multi-Year Price Determination] Methodology, following a public consultation process in line with the court judgement.

"This process entailed NERSA undertaking a detailed, component-by-component recalculation of Eskom's Generation RAB, using the same information originally submitted by Eskom in its MYPD6 application and applying the approved methodology strictly," a NERSA statement read.

The total additional revenue for Eskom will be implemented in phases.

"The phased approach limits additional price impacts to single digit increases in 2026/27 and 2027/28, and avoids any retrospective adjustment for 2025/26, in line with the court judgment. It further reduces tariff volatility and demand erosion risk and balances Eskom's financial sustainability with customer affordability. No retrospective tariff increases were applied.

"The re-determination is consistent with the statutory tariff principles, which require tariffs that enable an efficient licensee to recover the full cost of licensed activities, including a reasonable return.

"NERSA's adopted WACC [Weighted Average Cost of Capital] and phased recovery reflect an approach that ensures Eskom receives a reasonable, cost-reflective return while mitigating immediate tariff shocks, limiting demand erosion, and maintaining tariff stability. NERSA remains committed to transparent, fair, and independent regulation in the public interest," the statement read.

Read the original article on SAnews.gov.za.