Eskom’s proposed 2027/28 tariff changes could see fixed electricity charges rise significantly. Merilynn du Plessis explains what the proposals mean for consumers, including potential increases of more than 20% and NERSA’s public consultation process.
Transcript
[00:08][Eon] Welcome to Legal Talk here on eRadio on this Wednesday, and Eskom's proposed electricity tariff charges or changes for the 2027 and 2028 financial year are generating considerable discussion, especially in the last week or two, and particularly around the increase in fixed charges that many consumers will have to pay regardless of how much electricity they use.
[00:38][Eon] So, the National Energy Regulator of South Africa, NERSA, has now opened the proposed tariff structure for public comment, giving consumers and stakeholders an opportunity to weigh in before the changes are obviously finalized.
[00:53][Eon] So, to help us understand what these proposals could mean for households and businesses, we're joined by attorney, Merilynn du Plessis, from Hahn & Hahn.
[01:04][Eon] Merilynn, good morning, and thank you for joining us.
[01:08][Merilynn] Good morning, Eon and listeners. Thank you for having me today.
[01:12][Eon] So, Marilynn, what on earth is happening here?
[01:16][Merilynn] Okay, so while the 8.3 increase has attracted most of the attention, the real story lies in how Eskom proposes to recover that revenue. For many customers, the impact will depend less on the headline percentage and more the increased in fixed charges and how those charges are applied across different categories.
[01:40][Eon] So, that's an important distinction. Is the 8.83 percent figure therefore a true reflection of what consumers can expect to pay?
[01:50][Merilynn] No, Eon, not necessarily. The eight point, eight point three, 8.83 figure is an average increase across Eskom Direct customers. While that may be technically correct, it doesn't mean every customer will see their bill increase by only 8.83 percent. When you look at the proposed tariff structure, some of the fixed charges are increasing by significantly more than that. For example, customers on certain homeowner tariffs could see fixed charge increases between 20 and 23 percent. As a result, some households may experience a much greater increase in the overall electricity costs than the headline figure suggests.
[02:35][Eon] 23 percent, that's insane, wow. You referred to fixed charges. What exactly are these charges, and why are they attracting so much attention, Merilynn?
[02:49][Merilynn] Okay, I know I keep on hammering on the fixed charges. The fixed charges are costs that consumers pay simply for being connected to the electricity grid. They're completely separate from any amount you would actually pay for the electricity that you actually use. Eskom's position is that in maintaining infrastructure, servicing connections, and administering accounts, all come with costs that exist regardless of consumption levels. However, many consumers are concerned because these fixed charges are becoming a larger portion of their monthly bill. So, that means even if a household reduces its electricity consumption, install solar, or makes effort to be, efforts to be more energy efficient, it may still face substantial monthly charges simply to remain connected to the grid.
[03:44][Eon]And how significant are these increases in practical terms?
[03:49][Merilynn] Eon, they're quite significant. According to the proposed tariff structure, consumers on home owner four, home power four tariff could see their fixed charges increase by more than 23 percent. What's particularly noteworthy is, from April 2027, customers on that tariff could be paying around R670 per month before consuming a single kilowatt hour of electricity. That shifts the discussion from simply asking what electricity costs per unit to asking how much consumers are required to pay before they even switch a light on or boil a kettle or charge a cellphone.
[04:32][Eon] Wow. And now NERSA has invited public comment. What exactly is being consulted on?
[04:40][Merilynn] Okay, so that's a very, very big point, an important point, because the consultation is not about whether Eskom should receive the appropriate, approved revenue. That determination has already been made through NERSA's regulatory process. What NERSA is consulting on is the tariff structure itself. In other words, whether the approved revenue is being recovered in a fair, reasonable, and cost-reflective manner. And just to pause there, I'd like to take us back to my previous podcast, where I broke down the fair, the rationality, and the cost-reflective manner. The Regulator has specifically invited comment on issues such as affordability, the impact on different customer groups, the implementation of Eskom's retail tariff plan, and whether the tariff structure appropriately allocates costs among consumers.
[05:40][Eon] And then, finally, Merilynn, what would you encourage our listeners to do if they are concerned about these proposed changes, which they rightfully do?
[05:53][Merilynn] Yes. I would encourage consumers to take time to understand how the proposed changes affect their particular tariff category and participate in the public consultation process. NERSA is inviting submissions precisely because public participation is an important part of regulatory decision-making. If consumers have concerns about affordability, fairness, or the impact of increasing fixed charges, this is now the opportunity to place those concerns before the Regulator before the tariff structure is finalized. The consultation paper and detail regarding the submission processes are available on NERSA's website at www.nersa.org.za. Consumers can access the Eskom retail tariff structure adjustment consultation documents and submit their comments before closing date of 2nd of October 2026 at four o'clock.
[06:55][Eon] Okay, so we have just under a month to do that.
[07:00][Merilynn] Yes, please, and I'd like to urge all public to come together. This is our opportunity that we've been discussing, saying that we need public participation and comments.
[07:13][Eon] Absolutely. And that was Merilynn du Plessis from Hahn & Hahn. Merilynn, thank you so much for your insights here today on Legal Talk.
[07:22][Merilynn] Thank you, Eon. Thank you for having me. Let's hope as many people can submit their, their, their comments as possible.
[07:31][Eon] Please do, because we don't want to pay so much for electricity.
[07:34][Merilynn] And we don't want it to keep on rising before it's too late.
[07:39][Eon] Yeah, and that's before you switch on a light or anything, you know, that's very, very concerning. But, Merilynn, thank you. I'm wishing you a wonderful Wednesday, and we'll chat again soon.
[07:50][Merilynn] Thank you, Eon, and everybody have a wonderful Wednesday.