- Civil society group warns higher electricity prices will deepen poverty and inequality.
- Calls for urgent reform of South Africa’s electricity pricing framework.
- Questions fairness and transparency of Eskom’s tariff setting and asset valuation.
The Green Connection has formally called on the National Energy Regulator of South Africa to reject further Eskom electricity tariff increases proposed under the Sixth Multi Year Price Determination process. The eco justice organisation has submitted its response to NERSA ahead of the 31 January deadline, warning that rising power prices risk deepening poverty, entrenching inequality and further harming vulnerable communities.
South Africa is already among the most unequal countries in the world, and The Green Connection argues that continued tariff increases will worsen existing socio economic pressures. The organisation also contends that the current electricity tariff setting system is unjust and no longer fit for purpose.
According to The Green Connection’s Programmes and Advocacy Lead, Lisa Makaula, NERSA is legally bound to comply with environmental and social obligations set out in the National Environmental Management Act. These include the requirement to consider social, economic and environmental impacts, ensure transparent decision making and guarantee access to information.
“These are not optional considerations. They are legal obligations,” says Makaula.
As an organisation focused on good governance and meaningful public participation, The Green Connection is calling on NERSA to redetermine Eskom’s multiyear tariff structure and to develop an approach that is genuinely in the public interest. While Eskom’s financial sustainability is important, the regulator must also recognise that further tariff hikes risk deepening energy poverty and undermining access to electricity as a basic human right.
The organisation argues that Eskom’s efforts to recover revenue shortfalls should not be passed on to consumers, particularly when these shortfalls stem from Eskom’s own reporting errors related to depreciation and the regulatory asset base.
“Ordinary people should not be burdened by regulatory or institutional failures,” adds Makaula. “With persistent price increases, millions of households may be forced to choose between basic needs such as food, education and electricity.”
The Green Connection has also endorsed a submission by environmental justice organisation groundWork, which highlights the broader socio-economic risks of rising electricity prices. groundWork notes that an estimated 13.2 million people in South Africa were living in extreme poverty in 2024, surviving on less than US$2.15 a day, equivalent to around R40. This represents nearly 140,000 more people in extreme poverty compared to the previous year.
Without urgent reform, this number is expected to rise further, particularly in light of Eskom’s 2024 revenue application. Eskom proposed a 36% increase in standard tariffs for 2025/26, followed by increases of 12% in 2026/27 and 9% in 2027/28. Although NERSA approved lower increases, The Green Connection argues that the approved hikes still exceed inflation and remain unaffordable for most households.
Electricity pricing reform remains stalled
Neville van Rooy from The Green Connection points to statements by Electricity and Energy Minister Kgosientsho Ramokgopa, who has acknowledged that rising electricity prices are worsening energy poverty and are unsustainable. Despite this acknowledgement, Van Rooy says the electricity pricing policy and cost reflective tariff framework have not been reviewed.
“This is precisely why South Africa remains trapped in a broken electricity system,” he says. “Without policy reform, NERSA’s decisions may be constrained by rules that no longer serve the public interest.”
Van Rooy adds that NERSA must also fulfil its mandate under the Electricity Regulation Act by protecting consumers through transparent processes and meaningful public participation. This includes providing clear information on how Eskom’s asset base is valued, as a lack of transparency effectively forces the public to accept tariff increases without adequate justification.
These concerns have been reinforced by a High Court judgment which noted that, in the dispute between Eskom and NERSA, there was uncertainty over Eskom’s allowable revenue and even over the correct value of the regulated asset base itself.
Questioning coal-based assumptions in a renewable transition
The Green Connection also challenges Eskom’s continued reliance on coal-based assumptions in its tariff applications, particularly given South Africa’s stated transition towards renewable energy. The organisation argues that renewable energy infrastructure is significantly cheaper to build and operate than new fossil fuel projects, raising questions about Eskom’s claims regarding future asset replacement costs.
“If Eskom’s transition plan is genuinely towards renewable energy, the cost of replacement is likely to be far lower than current assumptions,” says Makaula. “This is especially true when compared to expensive coal projects such as Medupi and Kusile.”
She adds that NERSA must rigorously interrogate Eskom’s figures and approve only the funding necessary to support a just and affordable transition away from coal.
Since 2008, Eskom’s tariffs have increased more than fivefold in real terms, yet electricity affordability has continued to deteriorate. With an estimated 60% of South Africans living in poverty and a further 20% at risk of falling into poverty, The Green Connection argues that the current pricing trajectory is unsustainable.
“NERSA cannot effectively serve the public through narrow tariff decisions while the broader electricity pricing framework remains fundamentally broken,” Makaula concludes.
Author: Bryan Groenendaal
