South Africa’s energy crisis doesn’t just affect the lights in our homes—it impacts every facet of our economy, from household budgets to the survival of small businesses. At the heart of this crisis lies Eskom’s Multi-Year Price Determination (MYPD), a process that shapes the cost of electricity for years to come.

Eskom’s MYPD6 application for 2025/26, 2026/27 and 2027/28, proposed a staggering 66% tariff increase over the three years. This isn’t just a number on paper—it’s a potential blow to millions of South Africans already battling rising living costs. OUTA made a submission to the National Energy Regulator of South Africa (Nersa) challenging this application because we believe South Africans deserve transparency, accountability, and fair pricing in return for reliable energy.

What is the MYPD6?

The Multi-Year Price Determination (MYPD) is a framework used by Nersa to set Eskom’s electricity tariffs over a multi-year period. This process determines how much Eskom can charge for electricity, directly impacting your monthly bills.

The MYPD6 application covers the fiscal years 2025/26 to 2027/28. Eskom asked for an increase of 36.15% in the first year, 11.81% in the second year and 9.1% in the third, an alarming 66% increase over the three years, citing the need to cover operational costs, debt servicing, and infrastructure maintenance. Nersa called for public comment.

Issues and concerns

OUTA identified several critical issues with Eskom’s MYPD6 application:

• Excessive price hikes: A 66% increase is not just excessive—it’s unsustainable. This will place an unbearable financial strain on ordinary South Africans, small businesses, and the broader economy, especially in the context of rising food, fuel, and living costs.
• Operational inefficiencies: Eskom’s history of poor financial management, operational failures, and load-shedding raises serious doubts about its ability to effectively utilize the additional revenue. Why should consumers pay more for less reliable service?
• Lack of transparency: There’s insufficient clarity on how the requested funds will be allocated. Eskom’s financial mismanagement and corruption scandals over the years make it critical for tariff increases to be accompanied by full accountability.
• Economic impact: Higher electricity costs will not just affect households; they will ripple through every sector, increasing the cost of goods and services and further stifling economic growth.

Eskom's retail tariff plan (RTP) application follows the MYPD6 application, and aims to set the individual tariffs in line with the overall increase. 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 opposed this application, partly because of the costs, but also because we called for tariffs which are clear, simple and fair, and which support clean energy and efficient energy use.

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.

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2022/23

19 September 2022: OUTA submission to NERSA on Eskom’s MYPD5 pricing application, in which OUTA called for NERSA to limit Eskom’s increase to a CPI increase only. See more here and the submission here.

10 August 2022: OUTA submission to NERSA on the consultation paper on the methodology for the determination of tariffs and prices in the electricity industry. The submission is here.

12 July 2022: OUTA and 15 other civil society organisations write to Minister of Mineral Resources and Energy Gwede Mantashe, calling on him to immediately allow new renewable energy to be built and connected to the grid. The Integrated Resource Plan (IRP) of 2019 includes plans to build renewable energy plants that can provide 20 400 MW of electricity and 2 088 MW of storage by 2030, but so far the Minister has issued determinations for only 6 800 MW of renewable energy and 513 MW of storage. See more here.

30 March 2022: OUTA makes a presentation to the Electricity Wheeling Conference in Cape Town, saying prosumers should be encouraged not penalised, and wheeling charges should be related to maintenance costs not profits. The presentation is here.

25 March 2022: OUTA makes two submissions to the Minister of Mineral Resources and Energy, one commenting on the draft Electricity Pricing Policy (see here) and the other on the Electricity Regulation Amendment Bill (see here). More on OUTA’s comments on these is here.

7 March 2022: OUTA submits comments to the National Energy Regulator (NERSA), opposing Eskom’s application for a Regulatory Clearing Account top-up for 2020/21, and calling for this pricing mechanism to be overhauled. The submission is here and more information is here.

2021/22

22 October 2021: OUTA makes a submission to NERSA on its consultation paper on a new electricity methodology. OUTA's submission agreed that the methodology needs updating but called for a more thoughtful, inclusive and longer public consultation process. A summary is here and the submission is here.

May 2021: OUTA writes to the City of Johannesburg, objected to the proposal to charges prepaid electricity users a new monthly levy. The City subsequently drops the proposal.

2020/21

February 2021: OUTA made a submission to NERSA, opposing the Minister of Mineral Resources and Energy's proposal to build 2 500 MW of new nuclear power. See more on OUTA's objections to this here.

June 2020: OUTA OUTA makes a submission to the City of Johannesburg on the City's draft budget for 2020/21. OUTA submission included objecting to the City's proposal to introduce a new monthly charge for domestic and business prepaid users. The submission is here. The City dropped this from the final budget.

April 2020: OUTA called for a 0% increase in the Eskom electricity price and made a submission to NERSA on this.

NERSA is considering how much the municipalities will be allowed to increase the price of electricity to their customers on 1 July 2020. The regulator’s proposal is for an increase of 6.24%. This is based on the previously approved average increase in Eskom’s prices of 8.76% and Eskom’s increase in the price of bulk electricity to municipalities of 6.9%. The municipal increase is calculated on the assumption that 74% of a municipality’s electricity costs are buying bulk electricity from Eskom and the rest of the costs, which include salaries, repairs and maintenance, will increase at a lower rate than the bulk electricity increase.

OUTA’s submission is here.

NERSA’s proposal on the municipal price increase is here and call for comment is here.