Salga said it is concerned that consumers are expected to pay billions more due to Nersa's mistake.
The organisation that oversees local government in South Africa has criticised Nersa’s secret R54 billion settlement with Eskom, saying the country’s citizens cannot continue to bail out government’s inefficiencies.
Nersa confirmed this week that it made a mistake in determining Eskom’s revenue for this and the next two financial years.
Nersa’s blunder making SA’s cost-of-living crisis worse
It means South Africans will have to pay R54 billion more through higher electricity tariffs over the next few years.
Earlier this year, Nersa approved electricity price hikes of 12.74% for the 2025/2026 financial year, 5.36% for 2026/2027 and 6.19% for 2027/2028.
Nersa’s error will now see tariff increases of 8.76% % in 2026/27 and 8.83% in 2027/28.
ALSO READ: Nersa blunder on Eskom’s electricity tariffs triggers public backlash
Salga on Friday said this blunder will worsen the cost-of-living crisis in South Africa.
“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,” it said.
Municipalities face ‘severe’ risks
It also said the country’s municipalities will face “severe” risks as the revised tariffs will lead to fewer South Africans being able to pay for electricity and more illegal connections emerging.
“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.”
ALSO READ: Nersa confirms R54bn secret settlement with Eskom, consumers to pay
Salga said passing the cost of Eskom’s mismanagement and historic inefficiencies to consumers is not the solution to the parastatal’s financial challenges.
“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 Bheke Stofile.
Salga calls for reform in South Africa
It called for the following steps to be taken in response to Nersa’s settlement with Eskom:
- The settlement must be scrutinised 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 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 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,” it said.
