LEGAL TALK with Hahn & Hahn Attorneys: Eskom’s 2027 Tariff Hike Explained

Welcome to a legal talk here on the eRadio on this Wednesday and the SCOMs proposed electricity tariff charges or changes for the 2027 and 2028 financial year are generating considerable discussion especially in the last week or two and particularly around the increase in fixed charges that many consumers will have to pay regardless of how much electricity they use. So the National Energy Regulator of South Africa nurse has now opened the proposed tariff structure for public comment giving consumers and stakeholders an opportunity to weigh in before the changes are obviously finalized. So to help us understand what these proposals could mean for households and businesses we joined by Attorney Marilyn Duplicy from Anne and Anne Marilyn. Good morning and thank you for joining us. Good morning Anne and listeners thank you for having me today. So Marilyn what on earth is happening here? Well the 8.3 increase had attracted most of the attention, the real story lies in how SCOM proposes to recover that revenue. For many customers the impact will be less on the headline percentage and more the increased in fixed charges and how those charges applied across different categories. So that's an important distinction is the 8.83% figure therefore true reflection of what consumers can expect to pay? No you are not necessarily the 8.83 figure is an average increase across SCOM direct customers while that might be technically correct. It doesn't mean every customer will see they will increase by only 8.83%. When you look at the proposed stair structure some of the fixed charges are increasing by significantly more than that. For example customers on certain home owner tariffs could see fixed charge increases between 20 and 23% as a result some households may experience a much greater increase in overall electricity costs than the headline figures suggests. 23% of that's insane, wow you refer to fixed charges. What exactly are these charges and why are they attracting so much attention in Maryland? Okay I know I keep on hammering on the fixed charges. The fixed charges are costed consumers pay simply for being connected to the electricity grid. They completely separate from any amount you would actually pay for the electricity that you actually use. 8th condition is that in maintaining infrastructure, service and connections and administering accounts all come with costs that exist regardless of consumption levels. However many customers are concerned because these fixed charges are becoming a larger portion of the monthly bill so that means even if a household reduces its electricity consumption in stalls solar or makes effort to be more energy efficient, it may simplify substantial monthly charges to remain connected to the grid. And how significant are these increases in practical terms? You're not quite significant, according to the proposed stair structure, consumers on home only for home power for tariff could see the fixed charges increased by more than 23%. What's particularly noteworthy is from April 2027, customers on that tariff could be paying around 670 rent per month before consuming a single to know what our electricity. That shifts the discussion from simply asking what electricity costs per unit to asking how much consumers are required to pay before they even switch alight on or boil a kettle or charge a cell phone. Wow. And now Nursa has invited public comments, what exactly is being consulted on? Okay, so that's a very, very big point and important point because the consultation is not about whether ESCOM should receive the appropriate approved revenue. Do that determination has already been made through Nursa's regulatory process? What Nursa is consulting on is the tariff structure itself. In other words, whether approved revenue is being recovered in a fair reasonable and cost reflective manner. And just to pause there, I'd like to take us back to my previous podcast where I broke down the fear, the rationality in the cost reflective manner. The regulator has specifically invited comments on issues such as affordability, the impact on different customer groups, the implementation of ESCOM's retail tariff plan and whether the tariff structure appropriately allocates customer consumers. And then finally, Marilyn, what would you encourage our listeners to do if they are concerned about these proposed changes, which they rightfully do? Yes. I would encourage consumers to take time to understand how the proposed changes are fixed, the particular territory of category, and participate in the public consultation process. And that invite is inviting submissions precisely because public participation is an important part of regulatory decision making. If consumers have concerns about affordability, fairness or the impact of increasing fixed charges, this is now the opportunity to place those concerns before the regulator, before the tariff structure is finalised. The consultation paper and detailed regarding the submission processes are available on Nash's website at www.nash.org.z/a. Consumers can access the ESCOM retail tariff structure adjustment consultation documents and submit their comments before closing date of 2 October 2026 at 4 o'clock. Okay, so we have just under a month to do that. Yes, please. And I'd like to urge all public to come together. This is an our opportunity that we've been discussing, saying that we need public participation and comments. Absolutely. And that was Marilyn Duplici from Han and on. Marilyn, thank you so much for your insights here today on the legal talk. Thank you, Ian. Thank you for having me. Let's hope as many people can submit their comments as possible. Please do, because we don't want to pay so much for electricity. And we don't want to keep on rising before it's too late. Yeah, and that's before you switch on a light or anything, you know, that's very, very concerning. But Marilyn, thank you. Thank you. I'm wishing you a wonderful Wednesday and we'll chat again soon. Thank you, Ian and everybody have a wonderful Wednesday. Are you all your business in trouble and struggling to find a solution? Call Han and Han attorneys as we assist clients in finding solutions. We specialize in consumer and food law, commercial and construction law, forensic investigations and administrative law. Visit HanLaw.co.z That's H-A-H-N. We assist clients nationwide. Han and Han attorneys because we care. Don't miss legal talk with Han and Han attorneys Wednesday mornings at 10 on E-Radio.