Energy regulator Nersa has officially approved average electricity tariff increases of 8.76% for Eskom direct customers and 9.01% for municipalities for the 2026/2027 financial year – once again pushing up the cost of power well above the rate of inflation.
The price hikes had been expected but have now been rubber-stamped by Nersa after it approved Eskom’s retail tariff application at a meeting on 5 March.
The 8.76% increase for direct customers takes effect on 1 April 2026 and runs until 31 March 2027, while the 9.01% municipal increase kicks in on 1 July 2026 and runs to 30 June 2027. The difference reflects the different financial years used by Eskom and municipalities.
The hikes continue a pattern that has seen the cost of electricity in South Africa spiral far ahead of general inflation. In recent years, tariff increases have been relentless: 15.63% in 2021/2022, 9.61% in 2022/2023, 18.7% in 2023/2024, 12.7% in 2024/2025 and 12.74% in 2025/2026. Between 2007 and 2024, Eskom tariffs rose by about 937% against general inflation of 155% over the same period – meaning electricity has become roughly six times more expensive in real terms.
This latest round of increases is significantly higher than it was originally supposed to be, and the reason is a massive calculation error by Nersa itself.
Material errors
When Nersa approved Eskom’s Multi-Year Price Determination 6 (MYPD6) application in January 2025, it set tariff increases for 2026/2027 at just 5.36% and for 2027/2028 at 6.19%. But Eskom quickly challenged the decision, arguing that Nersa had made material errors in calculating its Regulatory Asset Base, particularly for its generation business. Eskom claimed the errors amounted to as much as R107-billion in understated revenue.
Nersa conceded in mid-2025 that it had indeed got its sums wrong and initially valued the shortfall at R44-billion. Eskom pegged the figure at R66-billion, and the two entities settled on R54-billion – an amount to be clawed back from electricity consumers through higher tariffs.
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But when the two parties tried to have the settlement made an order of court, the high court in Pretoria threw it out in a scathing December 2025 ruling. Judge JJC Swanepoel found that the secret settlement between the two entities had unlawfully excluded the public from a decision that directly affects every electricity consumer in the country.
The judge was particularly critical of Nersa’s motives, finding the regulator was “clearly embarrassed by its mistake” and that its decision to settle behind closed doors was “at least partially, to avoid public scrutiny of its error”. He described the R54-billion settlement figure as little more than “a thumb-suck”.
The court ordered Nersa to redo its determination after a public consultation process, which it completed on 7 February 2026. The regulator conducted a component-by-component recalculation of Eskom’s Generation Regulatory Asset Base and settled on R54.7-billion in additional allowable revenue, to be phased in over three years: R12-billion in 2026/2027, R23-billion in 2027/2028 and R19.7-billion in subsequent years.
The result is the 8.76% increase now approved for 2026/2027 – up from the 5.36% originally envisaged – with a further 8.83% increase set for 2027/2028, up from 6.19%.
Nersa has appointed a forensic investigation firm to examine the causes of the error.
Nersa said in its statement that it had taken stakeholder comments into consideration in making its decision, including concerns about the impact of tariff increases on consumers. Its reasons for decision document will be published on the Nersa website in due course, it said. – (c) 2026 NewsCentral Media
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