Cape town: The National Energy Regulator of South Africa (NERSA) has approved a significant electricity price hike, with an 8.76% increase set for April this year and an 8.83% increase scheduled for April 2027. This decision marks a redetermination of Eskom's price increases for the next two years, initially set at 5.36% for 2026/27 and 6.19% for the 2027/28 financial year.

According to South African Government News Agency, the redetermination follows a High Court judgment in December, which required NERSA to revisit its decision on Eskom's Generation Regulatory Asset Base (RAB) for the financial years 2025/26, 2026/27, and 2027/28. The reassessment was conducted using the approved Multi-Year Price Determination (MYPD4) Methodology, adhering to a public consultation process mandated by the court judgment.

NERSA undertook a detailed recalculation of Eskom's Generation RAB, employing the same data originally submitted by Eskom in its MYPD6 application, and strictly applied the approved methodology. The additional revenue for Eskom will be implemented incrementally to limit the impact on consumers.

The phased implementation is designed to keep additional price increases to single digits in 2026/27 and 2027/28, avoiding retrospective adjustments for 2025/26. This strategy aims to reduce tariff volatility, minimize demand erosion risk, and balance Eskom's financial sustainability with customer affordability.

The redetermination aligns with statutory tariff principles, allowing efficient licensees to recover the full cost of licensed activities, including a reasonable return. NERSA's adopted Weighted Average Cost of Capital (WACC) and phased recovery approach ensure Eskom receives a reasonable return while mitigating immediate tariff shocks and maintaining tariff stability.

NERSA emphasizes its commitment to transparent, fair, and independent regulation, serving the public interest.