The Green Connection has formally called on the National Energy Regulator of South Africa (NERSA) to reject further Eskom electricity tariff increases and rising power prices under the Sixth Multi Year Price Determination (MYPD6). The eco-justice organisation has submitted its response to NERSA (ahead of the 21 January deadline), with a warning that higher prices may deepen poverty, entrench inequality and harm already vulnerable communities across South Africa – already one of the most unequal countries in the world. They further argue that the current tariff-setting system for electricity is unjust and no longer fit for purpose.

According to The Green Connection’s Programmes and Advocacy Lead, Lisa Makaula, “NERSA is bound by the environmental obligations set out in section 2 of the National Environmental Management Act (NEMA). These principles require that social, economic and environmental impacts are properly considered, that decisions are taken openly, and that access to information is guaranteed. These are not optional extras – they are legal obligations.”

As an organisation that works to promote good governance, transparency and meaningful public participation, The Green Connection calls on NERSA to redetermine Eskom’s multi-year tariff structure and to instead propose a structure that is genuinely in the public interest. As the regulator mandated to protect consumers, NERSA must recognise that further tariff hikes may deepen energy poverty and could undermine access to electricity as a basic human right, while still ensuring that Eskom operates efficiently and sustainably.

Rising Eskom tariffs are deepening poverty and inequality
“Eskom’s attempt to recover revenue shortfalls should not be passed on to already struggling communities,” adds Makaula, “because these stem from its own reporting errors, related to depreciation and the regulatory asset base. Ordinary people should not be burdened by regulatory or institutional failures but with these persistent price hikes, millions of households may be forced to make difficult choices between basic needs such as food, schooling costs and/or electricity.”

The Green Connection also endorses the submission by groundWork, which raises several serious concerns. This includes the risk that these challenges will deepen if electricity prices continue to rise. groundWork emphasizes that, as of 2024, an estimated 13.2 million people in South Africa are living in extreme poverty, surviving on less than US$2.15 a day (approximately R40 per day at current exchange rates). This represents nearly 140,000 additional people pushed into abject poverty compared to the previous year.

“Without urgent reform, this figure is expected to increase further – especially considering Eskom’s 2024 revenue application, which proposed a 36% increase in standard tariffs for 2025/26, followed by additional proposed increases of 12% for 2026/27 and 9% for 2027/28. Although NERSA approved lower increases than those proposed, the approved hikes still exceed inflation and are likely to be unaffordable for most people,” says Makaula.

Electricity pricing policy remains unreformed despite Minister’s warnings
The Green Connection’s Neville van Rooy says that Electricity and Energy Minister Kgosientsho Ramokgopa has acknowledged the urgent need to address rising electricity prices, warning that steep tariff increases are worsening energy poverty and are unsustainable. “While we welcome the
Minister’s acknowledgement that rising electricity prices are worsening energy poverty, the reality is that the electricity pricing policy and cost reflective tariff framework have still not been reviewed, and this is precisely why South Africa remains trapped in a broken electricity system,” says van Rooy.

“It is the Minister’s responsibility to urgently review and reform this policy framework, because without this intervention NERSA’s decisions may be constrained by rules that no longer serve the public interest. At the same time, NERSA must fulfil its mandate – under the Electricity Regulation Act (ERA) – to protect consumers by acting transparently, promoting good governance and ensuring meaningful public participation in its processes. This must include providing clear information on how the value of Eskom’s asset base is calculated, because without transparency on these figures the public is effectively being asked to accept price increases blindly – and that is unacceptable.”

This concern is now reinforced by a High Court judgement which noted that, in the dispute between Eskom and NERSA, ‘nobody knows what the correct amount is for Eskom’s allowable revenue’ and that the regulator itself did not yet know what the correct regulated asset base should be.

Broken pricing model ignores shift to cheaper renewable energy
The Green Connection also draws attention to South Africa’s continued reliance on coal, which is economically and socially unsustainable, especially if Eskom’s transition plan is genuinely towards renewable energy. Eskom justifies tariff increases based on funding future asset replacement, yet it remains unclear how the value of its asset base is calculated. This is particularly important, as renewable energy is already significantly cheaper to build and operate than new fossil fuel power infrastructure.

“If Eskom’s transition plan is genuinely towards renewable energy, the cost of replacement is likely to be far lower than current assumptions, especially when compared with expensive coal projects such as Medupi and Kusile,” says Makaula. “This is why it is critical that NERSA rigorously interrogate Eskom’s figures and approve only the funding necessary to support a just transition away from coal.”

“This increase request may indicate that cost reflective tariffs are unaffordable and expose an electricity pricing system that may no longer be fit for purpose. Since 2008, Eskom’s tariffs have increased more than fivefold in real terms, yet affordability has only worsened. Eskom’s pricing trajectory may actively be deepening poverty and entrenching inequality. South Africans cannot continue to carry the burden of institutional failures while being told this is necessary for financial sustainability. With at least 60% of South Africans living in poverty and a further 20% at risk of slipping into poverty, this situation is simply untenable. NERSA cannot effectively serve the public through narrow tariff decisions while the broader pricing framework remains fundamentally broken,” concludes Makaula.