Analysis: Mteto Nyati retained in Eskom board chair seat as tariff debate heats up

There was much gnashing of teeth following the resolution of the National Energy Regulator of South Africa’s (Nersa) Multi-Year Price Determination (MYPD6) court remittal and the implementation of the FY2026/27 retail electricity tariffs.

But there’s an important distinction to make before diving into the tariff debate cauldron. Historically, electricity utilities bundled grid maintenance, capital infrastructure and energy generation into a single volume-based rate (cents per kilowatt-hour, c/kWh).

Under Eskom’s Retail Tariff Adjustment, fixed charges are separated from variable consumption charges to mirror the actual cost of supply.

This is in line with Minister Ramokgopa’s five core responsibilities:

• Universal access and price affordability: Extending power grid lines to rural areas, expanding off-grid solar and establishing 10-year price forecasts to keep tariff hikes in single digits;

• Regional energy security: Overseeing the operational recovery of power stations, finalising the updated Integrated Resource Plan (IRP 2025), expanding the Gas Masterplan and trading electricity with neighbouring countries via the Southern African Power Pool;

• Market unbundling and competition: Restructuring Eskom into separate operating units, establishing the independent National Transmission Company South Africa and implementing the Electricity Regulation Amendment Act;

• Economic transformation: Directing energy-sector investments towards black-owned businesses, women-led enterprises and youth technical training in clean technology; and

• Global and continental leadership: Establishing South Africa as an exporter of clean-energy technologies, nuclear expertise and green hydrogen across Africa.

Something old, something news

The minister, however, did not gather together journalists on the morning of Friday 25 September to tell them things they already know – although the decision to retain Mteto Nyati as Eskom board chair hardly came as a surprise.

And, since we’re counting, explaining that although the electricity bills will be higher, they will be split into clear items so consumers can see the exact cost of making electricity, sending it over high-voltage pylons and delivering it to homes was also not something novel.

“I stood here about six weeks ago, unveiling the electricity pricing policy proposals,” Ramokgopa said, handing Daily Maverick a hook to hang this article on.

“We make the point that there has to be an indication of what is the cost of primary energy, what is the cost of transporting the electrons, the electricity along the transmission line, what is the cost of distribution, and also ancillary activities.”

Currently, about 1%–1.5% of your power bill goes towards paying for people and municipalities who do not pay their bills. The minister wants to outlaw this hidden tax on paying households.

“The current arrangement or practice is that when municipalities and/or Eskom fails to collect, that failure to collect is priced into the tariff… So we say no, it’s not acceptable that you burden the same people who are paying. It’s a double jeopardy.”

“We also make the point, however, that you can’t burden the consumer as a result of technical inefficiencies,” the minister said, continuing to unfurl his thoughts of reformation. “Where there are technical losses, they are burdening the consumer, when in fact you should be redirecting your money to fix the infrastructure.”

So in the future, power lost owing to bad maintenance will have a strict legal limit; utilities must fix their broken wires instead of billing consumers for wasted energy.

Repositioning the cart and horse

When Mteto Nyati had a chance to address questions posed by attending media, he made it quite clear that he was not aware that he would be at the board meeting that would determine the trajectory of Eskom’s next evolution.

“I did not know whether I was going to be in that board meeting or not. Now I know, so I can safely say that one of the items that [we] will make sure that come out of it after those three days of that board meeting, of that strategy meeting, is for us to come up with a clear plan of how we are going to execute in line with what the minister has asked of us. We did this; this is not new to us. When we were faced with the energy crisis, we applied our minds at the board. We worked together with management; we came out with a generation recovery plan, which was a two-year plan that saw us getting rid of load shedding.”

Now that he has earned the faith of the minister for another three years – oddly one year ahead of Ramokgopa’s departmental strategy – the top goal is making electricity affordable.

Nyati argues that opening up the electricity market to private competition will force prices down through open market pressure. He adds that unbundling helps lower operational costs and that Eskom is not afraid of outside competition because it has 103 years of experience and believes it can outperform newcomers.

“Our priority is to also make sure that as we move into the new energies, the renewable energies, Eskom gets its fair share of the renewables energy market,” he said.

“In the past, somehow we had been told that we’re not going to be part of that. That was wrong decision. We want to get our fair share of that renewable energy market, because our clients expect us to provide that energy to them.”

Sweeping up the mess

Part of the overall strategy, of course, must address the biggest drag on the power utility’s revenue potential. Eskom is taking over billing and collections in struggling municipalities through special agreements, as well as installing smart meters to isolate illegal connections and ensure municipalities collect closer to 100% of electricity tariffs owed.

In December 2025, the Pretoria High Court sent Nersa’s previous calculation of Eskom’s power stations and grid assets (the Regulatory Asset Base) back for recalculation.

To fix calculation errors without shocking consumers, Nersa approved R54.734-billion in additional money for Eskom, but split the recovery over several years:

• 2026/27: R12-billion added (raising the price hike from 5.36% to 8.76%);

• 2027/28: R23.013-billion added (yielding an 8.83% increase for direct users and 8.84% for municipalities); and

• The remaining R19.721-billion is delayed until after 2028 to keep current price hikes in single digits.

Eskom is doing this because wealthier homes and businesses are installing solar panels, causing Eskom’s electricity sales volume to fall by 6.2% (down to 178TWh).

There’s also the reality that high-voltage lines and power stations cost money to maintain even when solar homes buy very little power from the grid. So, to Ramokgopa’s earlier point, if tariffs only charge per unit used, solar users pay almost nothing towards maintaining the grid, forcing non-solar households to pay for the entire power system.

Fixed monthly fees ensure everyone who stays connected pays their share.

So now we have the plan, stable leadership, and a minister who is not afraid to engage the highly critical media on each step on the path to reformation.

Unfortunately, there are still more questions than answers on how to modulate the application of tariff pressure to help protect the poor from the more affluent market liberalisation – or how to stick a clean audit landing after executing a messy breakup. DM