NERSA has opened public comment on Eskom's MYPD5 Regulatory Clearing Account application for 2024/25, with an August 14 deadline and a September 10 hearing — a retrospective tariff adjustment that every C&I energy buyer must stress-test against their grid cost forecasts and solar PPA payback models before it lands on their invoice.

The Hidden Tariff Bomb: Why NERSA's MYPD5 RCA 2024/25 Hearing Must Be in Every C&I Energy Model

South Africa's commercial and industrial (C&I) energy buyers are, by and large, fixated on the tariff increases they can already see on their invoices. What most are not modelling — and urgently should be — is the regulatory time bomb now quietly ticking inside NERSA's processing queue: Eskom's Regulatory Clearing Account (RCA) application for the 2024/25 financial year, operating under the Fifth Multi-Year Price Determination (MYPD5) framework.

This is not a theoretical risk. It is a live regulatory process with a hard deadline and a September hearing date — and its outcome could materially reprice grid electricity costs before the end of 2026.

What the RCA Is — and Why It's Never Really "Settled"

The Regulatory Clearing Account is Eskom's mechanism to claw back the difference between what NERSA approved it should earn in a given year and what it actually earned or spent. Think of it as a running settlement tab between Eskom and electricity consumers. When Eskom's actual costs exceed approved revenue — due to higher-than-anticipated primary energy costs, lower sales volumes, or under-recovery on allowed returns — it lodges an RCA application to recover the shortfall via future tariff adjustments.

Historically, RCA outcomes have added billions to consumer bills. In a landmark earlier decision, NERSA granted Eskom R32.69 billion following its RCA application for the 2nd, 3rd, and 4th years of the MYPD3 period (2015–2017), with the balance recoverable from standard tariff customers, local Special Pricing Agreements, and international customers. In 2020, Eskom's 2018/19 RCA application alone sought a total RCA balance of R27.3 billion.

Now the same process is in motion for the 2024/25 financial year — a period characterised by grid stabilisation costs, fuel price volatility, and shifting demand profiles that make the financial reconciliation complex and consequential.

The Key Dates Every C&I Buyer Must Diary

20 July 2026: NERSA officially published the Notice of Public Hearing on Eskom's MYPD5 RCA Application for Financial Year 2024/25.
14 August 2026: Deadline for submission of written comments on the RCA application.
10 September 2026: Public hearing on the RCA application.
Post-September 2026: NERSA deliberation and formal decision — with any approved RCA balance to be liquidated through future tariff adjustments.

These dates are not administrative footnotes. The written comment window — closing 14 August — is the last formal opportunity for organised industry bodies, large C&I buyers, and energy-intensive users to put evidence on the record before NERSA quantifies the balance and decides how quickly it will be recovered.

The Current Tariff Baseline — and Why the RCA Makes It Worse

The already-approved tariff trajectory for 2026/27 provides the uneasy baseline against which the RCA adjustment must be layered. NERSA approved an average electricity price increase of 8.76% for customers supplied directly by Eskom, effective 1 April 2026. Municipal bulk purchasers will implement their tariff increases, averaging 9.01%, from 1 July 2026, in line with the Municipal Finance Management Act.

These increases follow a 12.74% hike for Eskom direct customers implemented from 1 April 2025, with municipalities absorbing an 11.32% rise from 1 July 2025 — compounding the cumulative cost burden on C&I operations across all sectors.

Critically, the 2026/27 tariff structure includes a significant structural shift: the Generation Capacity Charge (GCC) has been increased to 30% of the originally proposed 2025/26 Retail Tariff Plan rand-value, up from the previous 20% — increasing fixed cost exposure for grid-connected users regardless of consumption volume.

An RCA recovery levy stacked on top of this baseline — even if phased over two years — could push effective C&I grid tariff escalation into double-digit territory again for the 2027/28 period, eroding the modest relief consumers expected from the 2026/27 settlement.

The Litigation Overlay: The Tariff Environment Is Legally Contested

The RCA hearing does not exist in a vacuum. The broader MYPD6 revenue determination has been embroiled in legal challenge. NERSA reportedly granted Eskom an additional R54 billion in revenue in a process that was not subjected to full public consultation — triggering legal challenges from civil society organisations and industry bodies, including AfriForum. Courts have intervened to require transparent, public regulatory processes, with a court-imposed timetable setting a deadline for NERSA to finalise tariffs for the 2027/28 financial year by 31 August 2026.

Additionally, NERSA conceded that its original MYPD6 Regulated Asset Base (RAB) calculations contained material errors that resulted in a significant understatement of Eskom's allowable revenue. A formal redetermination of the Generation RAB was published on 12 July 2026. These RAB revisions interact directly with the RCA mechanism — because Eskom's allowable revenue floor is recalibrated, the RCA balance for 2024/25 may be larger or smaller depending on the final RAB figure applied retroactively.

Bottom line for C&I buyers: You are not modelling one tariff trajectory — you are modelling the intersection of at least three regulatory processes: the approved MYPD6 path, the RAB redetermination, and the 2024/25 RCA. Missing any one of them produces a materially flawed energy cost forecast.

What This Means for Solar PPA Payback Models

For C&I buyers evaluating rooftop solar or ground-mount solar PPA structures, the RCA process is simultaneously a risk and an accelerant.

On the risk side: if your financial model uses only the NERSA-approved 8.76% tariff escalation as the grid reference rate and ignores additional RCA-driven adjustments, you are understating the cost of staying on the grid. Your PPA payback period will appear longer than it actually is — producing a conservative bias that may cause deals to be declined that are, in fact, well within acceptable IRR thresholds.

On the accelerant side: every rand of additional RCA-driven tariff recovery that NERSA approves increases the "avoided cost" value of on-site solar generation. Fixed-price PPA structures — typically contracted at a discount to the prevailing Eskom or municipal tariff — compound in value as the grid reference rate climbs. Fixed PPA pricing insulates C&I buyers from Eskom tariff escalation over the PPA term, and growing financial value accrues as South Africa's grid tariff trajectory continues to rise.

South African solar PPAs for C&I clients typically run for 10 to 20 years, with the developer owning, operating, and maintaining the plant, and the client paying only for the energy consumed. The combination of rising electricity tariffs, an improving Energy Availability Factor (EAF — which reached 65.85% year-to-date as of March 2026, reducing loadshedding risk), and structural tariff escalation creates a compelling case for locking in long-term fixed pricing now, before the RCA outcome reprices the grid baseline upward.

What C&I Buyers and Their Energy Advisors Must Do Before 14 August

Download and read the NERSA RCA 2024/25 consultation document from the NERSA website. Understand what cost variances Eskom is claiming — primary energy costs, operational expenditure, revenue under-recovery — and how they are presented.
Model three tariff scenarios in your energy cost forecast: (1) Base case — NERSA-approved MYPD6 path only; (2) Moderate RCA scenario — a single-digit percentage point adjustment layered onto 2027/28 tariffs; (3) Adverse RCA scenario — a double-digit cumulative adjustment if the RCA balance is large and recovered over one year.
Submit written comments by 14 August 2026 if your organisation has the capacity to do so. NERSA's process is formally open to public input, and energy-intensive users have standing to put technical and economic evidence on the record.
Re-run your solar PPA payback model using each of the three tariff scenarios above as the "avoided cost" grid reference. If the PPA delivers a positive IRR in even the base case, the moderate and adverse scenarios only improve the investment case.
Engage your solar developer or energy advisor to stress-test PPA escalation clauses against RCA-adjusted grid tariffs — ensuring the PPA rate remains competitive under all three scenarios through the full contract term.

The SolarXgen Field Perspective

Across our active C&I project pipeline, we are already re-running financial models to incorporate RCA sensitivity. The pattern we consistently observe: C&I buyers who model only the "approved" tariff trajectory underestimate the grid cost by 5–15% on a net present value basis over a 20-year PPA term. That gap — between modelled and actual grid cost — is where long-term solar PPA value is created or destroyed.

The August 14 comment deadline is not just a bureaucratic milestone. It is the last point at which the market can influence the scale and recovery timeline of a tariff adjustment that will appear on every C&I electricity invoice in South Africa within the next 12 to 18 months. Model it. Engage it. Don't let it arrive as a surprise on your balance sheet.