South Africa may see steeper-than-expected electricity tariff increases over the next three years, as Eskom warns that a pending court judgment could disrupt the timing and structure of its regulated price adjustments.
The state utility says it cannot confirm when the courts will rule on its R54-billion settlement with the National Energy Regulator of South Africa (Nersa), creating uncertainty for municipalities and energy planners.
The dispute stems from a settlement between Eskom and Nersa that allows the utility to recover R54 billion through tariff increases spread across the 2026/27 and 2027/28 financial years.
The agreement was not publicly disclosed until August 2025, when media reports revealed its existence, drawing criticism from civil organisations over transparency.
After the disclosure, the civil rights group AfriForum pressured Eskom to move the matter from the uncontested to the contested court roll. Eskom agreed, opening the case to public and industry participation.
The Minerals Council South Africa has since joined the proceedings, signalling broader industry concern about the impact of the settlement.
Eskom has already outlined the potential financial implications. If approved as originally framed, the settlement would add:
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R12 billion in allowable revenue in FY2027
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R23 billion in allowable revenue in FY2028
These adjustments translate into estimated tariff increases of 8.76% and 8.83% for those years. The remaining R19 billion in the settlement will be handled separately by Nersa, with a decision expected only after the 2029 financial year.
Eskom maintains that without a timely court ruling, it may be forced to delay implementation of the additional revenue into FY2028. This delay, the utility says, would make it increasingly difficult to limit future price adjustments to single-digit levels, potentially affecting tariffs well beyond the 2028 cycle.
Municipalities must table their own electricity tariffs by 15 March 2026, using Eskom’s wholesale price decisions to inform local increases. Without clarity on the court verdict, municipalities may struggle to produce accurate forecasts or to budget for the medium term.
Eskom did not provide a specific timeline for when a judgment must be delivered to avoid these disruptions. The utility stated only that the matter is before the courts and that it will not comment further until the ruling is issued.
The origins of the R54-billion settlement lie in what Nersa later described as a data input error involving the regulatory asset base and depreciation calculations.
Nersa acknowledged that it identified the discrepancy as early as January 2025 but did not correct the figures before issuing Eskom’s multi-year price determination.
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Following the public disclosure, Nersa faced scrutiny in Parliament. Executives admitted the error should not have occurred and pledged additional quality assurance steps, including external advisory reviews. One staff member linked to the mistake has been suspended.
According to Professor Sampson Maphweli of the South African National Energy Development Institute (SANEDI), consumers are likely to face the cost impact of the R54-billion adjustment—either now or later. He argues that unless public representatives present compelling evidence against the settlement, the court is likely to approve it.
Maphweli notes that even if the settlement is blocked, the underlying calculation errors would resurface in the next multi-year price determination cycle, still requiring some form of correction. Eskom’s financial position also limits alternatives, as the utility requires the revenue to stabilize operations.
South Africans are now waiting on the courts to resolve a regulatory dispute that could influence electricity prices for years to come.
The timing of the judgment will determine whether tariff increases remain within Eskom’s planned structure or whether delays trigger sharper adjustments across the 2027–2029 period.
For municipalities, industry, and households, the next phase of the case will play a key role in energy cost planning and affordability.
By Thuita Gatero, Managing Editor, Africa Digest News. He specializes in conversations around data centers, AI, cloud infrastructure, and energy.
