Electricity and Energy Minister Dr Kgosientsho Ramokgopa is confident that State-owned utility Eskom’s proposed tariff increase for direct customers of 36.15%, and a 43.55% hike in municipal tariffs, will not come to pass.

On September 24, Engineering News reported that the National Energy Regulator of South Africa (Nersa) had formally published Eskom’s highly controversial price allowable revenue application for the coming three years. Nersa will, in the coming months, hold public hearings on the proposed increases before making a final determination.

Speaking at the fourth yearly Climate Summit, in Johannesburg, on October 1, Ramokgopa said there was a policy intervention that he believed the Department of Electricity and Energy (DEE) could make to provide some degree of relief before the price increases were implemented on April 1 next year for direct Eskom customers and July 1 for municipalities.

“I must still canvass it internally, but I'm confident that we're going to succeed.

“I think we can make an intervention that is going to have an implication on that target, because they build it into that. However, I will make a submission so that we respect the Nersa public consultation process, but that submission is a function of policy. Nersa has no control over that. I have control, and so I'll make the submission on this policy question,” Ramokgopa said.

The sixth multiyear price determination (MYPD6) that Eskom submitted, shows that the utility has applied for allowable revenue of R446-billion for the 2025/26 financial year.

The three-year application also includes total revenue requests of R495-billion and R537-billion for the 2026/27 and 2027/28 financial years, with associated hikes of 11.81% and 9.1% for the two outer years of MYPD6 should the 36.15% increase be approved in the first year.

The application includes Regulatory Clearing Account determinations to allow Eskom to claw back revenue foregone in previous tariff periods and court outcomes, including a ruling allowing Eskom to recover residual amounts arising from the illegal removal of R69-billion from its asset base during the MYPD4 horizon.

“You are balancing the need for Eskom to be able to meet its obligation to keep the lights on and, on the other hand, you don't want to undermine the ability of the economy to grow, and you don’t want the poor to be pushed back into deeper conditions of poverty or of experiencing energy poverty in the country,” Ramokgopa said.

Previously describing Eskom’s proposed increases as “untenable” in Parliament in September, he now said the DEE would intervene with unspecified policy changes to head off the price hikes before Nersa came to a decision.

“We must find policy levers to protect the poor. We'll make that announcement. I'm confident we'll find each other with regards to what is possible going into the future,” Ramokgopa said on October 1.

He explained that there were policy instruments currently being applied that had a bearing on the Eskom application.

“That sits with us. So, we can simply suspend the application of that particular policy that has got a bearing on the 36.15%. We just have to say to Cabinet that the country is facing great difficulty, let's suspend this. We can apply it five years later. Then Eskom’s application will come down,” he said.

He further noted that there were other things that could be resolved outside of Nersa, one of which was addressing the performance of municipalities and increasing the share of renewable energy in the energy mix.

“We will provide relief to everyone, in particular, low-income households and businesses that want to remain competitive. I'm confident that [the tariff hike] will not be the figure that you are seeing, but Eskom's interest will still be protected,” Ramokgopa said.