Come on, Eskom, give us simple, fair tariffs

Residential electricity tariffs should be clear, simple and fair, and all tariffs should support clean energy and efficient energy use, says the Organisation Undoing Tax Abuse (OUTA).

OUTA has submitted detailed comments to the National Energy Regulator (Nersa) on Eskom’s Retail Tariff Plan (RTP) application for 2025/26. This submission follows Nersa’s call for public input on Eskom’s proposed tariff changes.

The RTP is Eskom’s tariff application, a follow-up to the entity’s sixth multi-year price determination (MYPD6) which will set the overall revenue and price increase for Eskom for April 2025 to March 2028. Eskom has asked for increases of 36.15%, 11.81% and 9.1% for the three years. This follows the 12.74% increase for 2024/25. Nersa is expected to announce its decision on MYPD6 before the end of this month. The RTP is designed to recover only the Nersa-approved MYPD6 revenue, and Nersa’s RTP consultation paper says the proposed tariffs may be adjusted, depending on the MYPD6 decision.

OUTA recognises the need for Eskom to recover its prudently incurred costs and operate sustainably. However, we believe that Eskom’s tariff proposals must strike a fair balance between cost recovery, affordability for consumers, and economic sustainability.

We oppose any changes that place an unfair burden on consumers or discourage energy efficiency and small-scale embedded generation (like rooftop solar).

OUTA’s key recommendations include:

• Simplifying residential tariffs: OUTA supports eliminating complex, punitive inclined-block tariffs for residential customers. We propose simple, flat-rate tariffs for prepaid customers and flexible, fair two-part tariffs for postpaid customers.

• Opposing mandatory time-of-use tariffs: Eskom’s proposal to impose mandatory time-of-use tariffs for customers with small-scale embedded generation is discriminatory. Tariff options should be voluntary and offer clear economic benefits to incentivise responsible energy use.

• Protecting affordability: We reject Eskom’s plan to significantly increase fixed charges in tariffs. Shifting risks to consumers while securing Eskom’s revenue is unacceptable and could harm affordability, especially for vulnerable households and struggling businesses.

• Promoting equity in municipal tariffs: OUTA recommends a thorough review of tariffs for municipal electricity distributors to ensure fairness, rationality, and alignment across different suppliers.

Eskom’s tariffs should be practical, equitable, and aligned with policy objectives, including supporting clean energy and efficient electricity use. OUTA also urges NERSA to conduct a thorough review of global best practices in tariff structures before approving significant changes.

OUTA remains committed to ensuring that Eskom’s tariffs are fair and sustainable while promoting transparency, accountability, and efficiency in the electricity sector.

More information

OUTA’s submission to Nersa is here.

A soundclip with comment by Advocate Stefanie Fick, OUTA Executive Director, in English is here and in Afrikaans is here.