By Lehlohonolo Lehana.
The National Energy Regulator of South Africa (Nersa) has confirmed Eskom’s retail tariffs and structural adjustment application for the 2026/27 financial year.
The hikes are higher than those approved as part of the sixth multiyear price determination (MYPD6) revenue decision, having been adjusted to take account of a R54.7-billion error made by the regulator when calculating Eskom’s regulatory asset base.
Nersa initially announced a behind-closed-doors settlement agreement with Eskom last year in relation to the error, but was ordered by the High Court in December to redetermine the amount only after having conducted a public consultation process.
The regulator, initiated consultations and completed a redetermination on February 7, when it announced that the R54.7-billion would be recovered by Eskom in the tariff over three financial years.
As a result, Nersa confirmed that the tariff for direct Eskom customers would rise on April 1, 2026, by 8.76% rather than the 5.36% approved previously, and by 8.83% on April 1, 2027, instead of the 6.19% outlined in the initial MYPD6 determination.
The decision was based on Eskom Retail Tariff Structural Adjustment (ERTSA) application submitted to Nersa on February 10.
“This difference in percentages is brought by the differences in implementation dates between Eskom direct customers and municipalities buying from Eskom,” Nersa said.
“According to the ERTSA methodology, Eskom must recover the full allowed revenue within its financial year, which is from April to March. However, the municipal financial year is from July to June,” the regulator explained in a statement.
It added that the decision had taken into consideration the comments raised by stakeholders, and said those comments and a reasons-for-decision document would be published in due course on its website.
Eskom will now, based on the adjusted revenue it will be allowed to recover from tariffs, work out its retail tariffs for each consumer group and submit them to Nersa for approval.
This will inform municipal budgets for 2026/27, and subsequently the applications municipalities submit to Nersa for approval of their retail tariffs which will be applied from 1 July.