The South African Local Government Association (SALGA) notes with deep concern the recent settlement between the National Energy Regulator of South Africa (NERSA) and Eskom, which will see consumers shoulder an additional R54 billion in costs through higher electricity tariffs over the next three years.

Under the agreement, electricity tariffs will rise by:

• 3.4% in 2026/27, taking the total increase for that year to 8.76%; and
• 2.63% in 2027/28, pushing the overall increase for that year to 8.83%.

Economic Pain for Households and Municipalities

South Africans are already grappling with soaring food inflation, rising fuel prices, and escalating living costs. These new electricity increases risk tipping many households further into hardship and deepening the crisis of affordability.

For municipalities, the fiscal risks are severe. Electricity is not only a basic service but also a key revenue stream that supports the cross-subsidisation of other municipal services. Steeper tariffs often lead to reduced payment compliance, illegal connections, and heightened community dissatisfaction undermining service delivery and weakening municipal finances.

“These tariff hikes are not just numbers on a page, they risk pushing households into deeper poverty, crippling municipal finances, and widening inequality,” said SALGA President, Cllr Bheke Stofile.

While SALGA recognises the urgent financial challenges Eskom faces, passing the cost of mismanagement, historic inefficiencies, and policy delays onto consumers cannot be the solution. The Association asserts that this approach entrenches a cycle of unaffordability and non-compliance, ultimately weakening the electricity supply industry as a whole.

SALGA Calls for:

• The sector to scrutinise further the settlement to ensure that consumers are not used as the default financiers of Eskom’s debt burden.
• Urgent acceleration of electricity sector reforms, including the restructuring of Eskom and the implementation of the Electricity Distribution Industry Reform Roadmap.
• Government intervention to subsidise and cushion poor households and vulnerable municipalities from further tariff shocks. A need to review the Free Basic Electricity Policies.
• A sustainable, transparent cost-recovery framework that balances Eskom’s financial needs with consumer affordability and municipal viability.
• Introducing cost-reflective tariffs in a way that shields vulnerable households.

SALGA’s position is clear: South Africans cannot continue to bail out systemic inefficiencies through perpetual tariff hikes. The country requires bold structural reform, not repeated tariff increases that deepen poverty, undermine municipalities, and place the economy at risk.

SALGA will intensify its engagement with NERSA, Eskom, and government to press for solutions that are fair, affordable, and sustainable, and will continue to defend the interests of municipalities and the communities they serve.