“Indefensible”: AfriForum warns Eskom’s fixed-charge strategy could backfire

Eskom’s proposed 8.83% average tariff increase for 2027/28 hides a sharper rise in fixed charges, the fees households pay before using a single kilowatt-hour. Under its retail tariff restructuring, fixed fees for direct customers would rise to the full target amount, with daily charges up by between 11.9% and 23.3%. Homeflex 4 customers would pay about R670 a month in fixed costs alone. AfriForum, which is opposing the application, says this penalises South Africans who cut their usage, will drive more paying customers off the grid, and shows NERSA is failing to protect consumers. If approved, the changes take effect on 1 April 2027..By Myles Illidge.AfriForum has written to the National Energy Regulator of South Africa (NERSA) requesting that it reject Eskom’s application for another round of electricity tariff increases in 2027.The civil action organisation also wants the regulator to assess Eskom’s future applications critically, and has warned the power utility its fixed charge increases could have severe unintended consequences.“While Eskom is effectively driving up the cost of living by shifting the financial burden onto customers, NERSA is neglecting its duty to protect the public,” it said.AfriForum said Eskom’s application shifts most of the burden of higher tariffs onto fixed charges paid by customers.“This means that the announced 8.8% increase will cost those who are trying to use less electricity more, as these costs cannot be managed through reduced consumption,” it said.AfriForum adviser for local government affairs, Dalena Beyers, said the move was a short-sighted decision by Eskom.“Although it may improve Eskom’s finances in the short term, it is causing an increasing number of consumers to try and disconnect themselves from the grid,” she said.“In the long term, Eskom will lose more paying customers, ultimately leading to even greater financial distress.”Beyers took issue with Eskom’s ability to justify paying R5.4 billion in bonuses on the back of profits while being unwilling to adjust tariffs for consumers. She said it was also an indictment of NERSA.“As the regulator, NERSA is supposed to protect the interests of the public, but its failure to critically scrutinise Eskom’s tariff increases is not only bad news for consumers, but also for Eskom,” she said.AfriForum explained that the latest application formed part of a 3-year process. During the cycle, a calculation error resulted in significantly higher tariff increases than initially announced.“The coming financial year is the third year of the original application and the second year in which tariffs have been adjusted upwards as a result of the calculation error,” it said.“There is still an outstanding amount that must be recovered in the next cycle, but it is not yet known how this will be applied.”Eskom’s tariff application is “indefensible”.In September 2026, AfriForum announced that it would formally oppose Eskom’s application to raise the average electricity tariff by 8.83% for the 2027/28 financial year.The civil action organisation described the tariff application as being “indefensible”. Officially, the Eskom Retail Tariff Structural Adjustment (ERTSA) lists an 8.84% increase for municipalities.It lists an 8.83% tariff increase for Eskom Direct customers. However, these are just averages, and the average tariff hides a significant increase in fixed electricity charges.Currently, Eskom’s fixed charges to direct customers are only two-thirds of the final amount the utility wants to charge..Read more:.Nersa faces backlash over R54bn Eskom error and hidden settlement.The ERTSA aims to raise Eskom’s fixed fees to 100% of the final amount. A separate service and administration charge will also increase by almost 50%.In Eskom’s Homepower/Homeflex tariff structure, customers under the Homeflex 4 programme will be hit by the most significant increases.They will see the current fixed daily cost of R17.86 increase to R22.03 by 2027/2028, a 23.3% increase, amounting to R670 per month.These fixed fees are charged before customers consume a single kilowatt-hour of Eskom’s electricity. If approved, the changes will be implemented for direct customers on 1 April 2027.The table below summarises the current fixed charges that Eskom Direct customers pay and the proposed increase to their fixed fees for 2027/28..This article was first published by MyBroadband and is republished with permission..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

“Indefensible”: AfriForum warns Eskom’s fixed-charge strategy could backfire

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