AfriForum to Oppose Eskom's 8.8% Electricity Tariff Increase Application to NERSA
- AfriForum announced it will submit formal comments to NERSA opposing Eskom's proposed average 8.8% tariff hike for 2027/28
- AfriForum's Morné Mostert pointed to Eskom's R30.35 billion profit and executive remuneration as reasons consumers should not absorb further increases
- The organisation cited the Electricity Regulation Act and Electricity Pricing Policy to argue that tariffs must exclude inefficiencies and excessive executive benefits
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SOUTH AFRICA — Civil rights organisation AfriForum has announced its intention to formally oppose Eskom's application for an average electricity tariff increase of approximately 8.8% for the 2027/28 financial year, submitting comments to the National Energy Regulator of South Africa (NERSA) to contest the proposed hike.
AfriForum Manager for Local Government Affairs Morné Mostert outlined the organisation's objections, pointing to what he described as a contradictory financial picture at the state utility. Despite reporting a profit of R30.35 billion, Eskom simultaneously spent billions on diesel, paid out executive remuneration, and approached the regulator for higher tariffs.
Eskom's vicious cycle of rising tariffs
Mostert raised concern over a pattern he described as self-reinforcing. Electricity sales declined by 6.2%, yet Eskom's revenue grew because of successive tariff increases. As prices rise, households and businesses shift to alternative power sources, which further reduces sales volumes and, in turn, prompts the utility to apply for yet another increase.
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"Consumers should not finance the power utility's profits through above-inflation tariff hikes," Mostert said.
He also questioned the appropriateness of rewarding executives with performance incentives while the utility remains in debt and continues to seek higher payments from the public.
Legal grounds for AfriForum's opposition
AfriForum's submission will draw on two key statutory frameworks. The Electricity Regulation Act 4 of 2006 stipulates that tariffs should enable an efficient licensee to recover its costs, implying that inefficiencies should not be passed on to consumers. The Electricity Pricing Policy reinforces this by requiring that prices reflect the least-cost supply option and exclude irregular expenditure or excessive executive benefits.
On this basis, AfriForum argued that NERSA is obligated to weigh consumer affordability against Eskom's financial demands, rather than treating cost recovery as automatic. The organisation's intervention comes as South African households continue to face significant financial pressure from electricity costs, with tariff increases in recent years consistently outpacing inflation.
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Prepaid electricity users could benefit
In a related article, Briefly News reported on the Revised Electricity Pricing Policy recently released by South Africa’s Electricity Minister Kgosientsho Ramokgopa. This proposed overhaul aims to provide crucial protections for prepaid electricity users while addressing inefficiencies in billing practices.
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Source: Briefly News
