The South African Federation of Trade Unions (SAFTU) notes with deep concern the announcement by the National Energy Regulator of South Africa (NERSA) that it has reached a settlement agreement with Eskom granting an additional R54 billion in revenue over the Sixth Multi-Year Price Determination (MYPD6) period. This settlement, while correcting technical errors, represents yet another blow to the working class and poor households already devastated by austerity, unemployment, and rising living costs.
Tariff Increases Will Push Millions Deeper into Poverty
NERSA’s settlement confirms that electricity prices will rise above inflation for two consecutive years, with tariff increases now set to reach:
• 8.76% in 2026/27 (up from 5.36%)
• 8.83% in 2027/28 (up from 6.19%)
South Africa already has some of the highest electricity prices in Africa relative to income levels, with Stats SA showing 62% of the population living below the upper-bound poverty line (SALDRU, 2023). These increases will:
• Deepen energy poverty as poor households are disconnected or forced to limit usage;
• Increase operating costs for municipalities, many of which already face collapse;
• Place further pressure on small businesses, industry, and jobs.
Austerity and Eskom’s Debt Crisis
This settlement underscores a failed neoliberal approach to Eskom’s crisis:
• Instead of meaningful investment in public infrastructure and a just energy transition, government continues to burden consumers to bail out Eskom’s R400+ billion debt.
• Workers and communities are made to pay for decades of mismanagement, corruption, and looting under state capture, while the architects of these crimes remain unpunished.
• Treasury’s austerity budgets have starved Eskom of capital for maintenance and new build capacity, exacerbating load shedding, unemployment, and inequality.
Regulatory Capture and Lack of Transparency
NERSA’s decision to settle outside the normal public participation process raises serious concerns about transparency and accountability. The working class cannot be expected to bear higher tariffs negotiated behind closed doors while their voices are excluded. SAFTU calls for:
• Full public disclosure of the court process and modelling used in calculating this R54 billion shortfall;
• An urgent Parliamentary inquiry into the regulatory framework and Eskom’s financial model;
• A moratorium on above-inflation tariff hikes until affordability studies and equity impact assessments are conducted.
SAFTU’s Call for a Worker-Led Energy Transition
This crisis proves that the current model of corporatised, debt-driven Eskom is unsustainable. SAFTU demands:
1. Debt cancellation for Eskom’s odious debt, funded by redirecting corporate tax breaks, curbing illicit financial flows, and reprioritising public expenditure;
2. A massive public investment plan in renewable energy generation, storage, and transmission — under public ownership and democratic control;
3. A national programme to roll out free basic electricity for all households, with progressive block tariffs to cross-subsidise the poor;
4. Protection of all Eskom and municipal jobs, and a just transition for workers in coal-dependent regions;
5. Prosecution of all individuals and corporations implicated in the corruption and mismanagement that crippled Eskom.
This settlement is a temporary legal compromise, not a solution. It reveals a regulatory and energy system in crisis. Workers, the poor, and small businesses are once again being forced to finance Eskom’s mismanagement and the state’s austerity agenda.
SAFTU calls on all progressive forces — unions, community organisations, and social movements — to mobilise against unaffordable electricity tariffs, privatisation, and austerity policies. We will be taking this fight to NERSA, Parliament, and the streets.
The electricity system belongs to the people of South Africa, not the elites, not corrupt politicians, and not profiteers. Only a publicly funded, worker-controlled energy transition can ensure reliable, affordable, and sustainable electricity for all.
A Statement was issued on behalf of SAFTU by General Secretary Zwelinzima Vavi.
For more details, contact the National Spokesperson at:
Newton Masuku
066 168 2157
Newtonm@saftu.org.za
