Civil society organisations, political parties and even municipalities in Gauteng have resoundingly rejected Eskom's tariff hike application to Nersa, accusing the utility of displaying a “cavalier disregard and inadequate appreciation” of the impact these proposed hikes might have on the economy.
The National Energy Regulator of South Africa (Nersa) held public hearings in the province over two days to hear submissions on the power utility's sixth multiyear price determination revenue application for the next three years.
Eskom is asking for:
- a 36.15% tariff increase for the 2025/26 financial year;
- an 11.81% increase from April 1 2026 to March 31 2027; and
- 9.10% from April 1 2027 to March 31 2028.
As part of the application, Eskom aims to generate R446bn for the 2026 financial year, R495bn in 2027 and R537bn in 2028.
Nersa is expected to announce its decision on December 20.
Earlier, a small protest was staged by Build One SA (Bosa) outside the Gallagher Convention Centre — the venue of the hearings — where the political party harshly criticised Eskom's application.
Inside the venue, several organisations and citizens echoed this through their various submissions.
Among those to speak was Chris Yelland, energy expert and adviser at the Organisation Undoing Tax Abuse (Outa), who said the organisation “broadly opposes the application”.
"[Especially] coming as it does after 15 years of price increases that were always significantly above the inflation rate.
“When looking at Eskom's application, it becomes apparent that Eskom is really displaying a cavalier disregard and an inadequate appreciation of the negative impact of the proposed electricity prices,” he said.
Yelland said Outa rejected Eskom's claim that price increases were “generally good” for the economy.
He added that the power utility, in its application, focused more on “cost reflectivity by increasing its revenues and electricity tariffs” while showing “little serious attention” to reducing its cost structure, debt and finance costs and disposing of its noncore assets.
“We don't believe Eskom has shown an adequate appreciation of the impact [price hike] will have on the economy, GDP, inflation and employment. We [also] don't believe they've taken into account the impact on municipal electricity distributors who are already suffering from massive price increases ... [or] the indigent and middle income households.
Outa urged Nersa to not only “broadly reject” Eskom's application, but to also “shift the focus” to the “urgent need for improvement of Eskom's performance”.
When looking at Eskom's application, it becomes apparent that Eskom is really displaying a cavalier disregard and an inadequate appreciation of the negative impact of the proposed electricity prices.
— Chris Yelland
Adding to this was AfriForum's Morne Mostert, who said low-income households would bear the brunt of Eskom's proposed hikes.
“In the event that this application is granted, it would have an adverse economic impact on the country as a whole but specifically on lower income households. We submit that Eskom's performance doesn't meet the optimum 'efficiency' standards that were set, that the decade-long problem of financial mismanagement and manipulation of procurement procedures are still prevalent and these costs should not be transferred to consumers.
“We need to ask ourselves, is Nersa objective and ensuring the interests and needs of present and future electricity consumers and are they safeguarded during this process?” Mostert said.
Other speakers came from the Ferro Alloys Producers Association (Fapa) and the Association of the South African Chambers.
Fapa, in its submission, detailed the impact increased tariffs had on the industry in the past year as it pleaded with the regulator to be “sensible in its decision”.
“During 2024, more smelters have closed down and some that were in general maintenance were also declared uncompetitive. Only last month, further announcements were made within the smelting and steel industry — this must surely be a red light for Nersa when looking at ... a reduction in demand,” Fapa chairperson Nellis Bester said.
Bosa leader Mmusi Maimane vowed to mount a challenge “at all levels” should Eskom's application be granted by Nersa.
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