Durban — The eThekwini Ratepayers and Residents Association (ERRA) has lodged objections to Eskom's “unjustified” tariff increase for financial years 2026–2028.
Eskom applied for a tariff increase of 36.15% for the 2025-26 financial year and also submitted its proposed tariff increases for the next three years to the National Energy Regulator of South Africa (NERSA). On Thursday, the ERRA submitted its comments to Nersa voicing its serious objections.
Nersa said in a statement that Eskom was following procedure and public hearings on the tariff increase application would be held in KwaZulu-Natal on November 21.
ERRA chairperson Ish Prahladh said the objection was for the fiscal years 2026, 2027, and 2028, where revenue increases of R446bn, R495bn, and R537bn are requested.
Prahladh said this objection reflects deep concerns regarding the projected revenue hikes, the methodology used, and the serious socio-economic impact these increases will have on residents and businesses across eThekwini.
The association stated that the continued reliance on an old price determination methodology for the 2026-2028 one undercuts the accuracy and relevancy of Eskom’s revenue requirements in a rapidly changing energy landscape.
“This methodology was originally designed to support operational stability, and does not account for Eskom’s escalating inefficiencies and lacks provisions to ensure Eskom’s costs are prudently managed,” ERRA said.
They pointed out specifically the increased primary energy and operational costs: Eskom’s dependence on costly coal procurement and ongoing logistical inefficiencies contribute substantially to these proposed revenue increases, yet there is no robust accountability mechanism to drive down these costs.
The association also highlighted the “questionable treatment” of workforce costs.
The significant increase in operational expenses, particularly regarding workforce management, has not been justified with “sufficient detail or transparency”, leaving ratepayers to bear the costs of systemic inefficiencies, it said.
It said there would be an “excessive cost burden” on ordinary ratepayers, and small businesses across eThekwini, which would be bad for the local economies and essential services.
“The proposed revenue increases reflect an unsustainable approach that disproportionately impacts ratepayers already struggling with high costs of living, stagnant wage growth, and severe energy insecurity due to frequent load shedding,” said Prahladh.
“Small businesses, are already grappling with operational challenges, are at risk of closure, which in turn threatens jobs and economic stability. Additionally, essential services and facilities that rely on electricity to serve vulnerable populations would face rising operational costs, affecting service quality and accessibility,” Prahladh said.
The association said Eskom’s new multi-year application fails to adequately address ongoing inefficiencies – including ageing infrastructure, the lack of proactive maintenance and procurement problems, particularly of coal - within its operations, resulting in continued financial instability that is then transferred to the ratepayer.
There was a need for “comprehensive” tariff determination reform and public engagement, said the association.
It said this revenue application proceeded without addressing necessary structural reforms to Eskom’s tariff system. Given the socio-economic disparities among consumer groups, a “one-size-fits-all approach” to revenue collection is inequitable.
The ERRA and its affiliates call upon Nersa to:
- Reject or significantly reduce the requested revenue increases, ensuring they reflect only necessary, prudent costs rather than inefficiencies.
- Mandate a third-party audit of Eskom’s cost structures to identify potential savings, cost-cutting measures, and management reforms.
- Implement a phased and equitable tariff restructuring to prioritize fairness, sustainability, and accessibility, safeguarding essential services and vulnerable consumers.
- Expand the scope and depth of public consultations to involve diverse stakeholder voices, fostering greater transparency and a collaborative decision-making process.
“We trust that Nersa will critically assess Eskom’s application with these considerations in mind, balancing the sustainability of Eskom’s operations with the socio-economic welfare of South African ratepayers,” Prahladh said.
In a statement, Nersa explained that the process was the basis for the determination of tariffs for various customer categories.
“To ensure that electricity prices in South Africa are implementable by 1 April 2025, Eskom is required to table a Nersa-approved tariff in parliament before 15 March 2025. Nersa will collate all comments received, which will be taken into consideration when the decision is made. Public hearings will be held in KwaZulu-Natal on November 21, where presentations may be made by interested and affected parties.”
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