Eskom acting chief executive, Calib Cassim said Eskom’s request amounts to R445 billion for 2025-26, R495 billion for 2026-27 and R537 billion for 2027-28, translated to electricity price hikes of 36.1% in 2025, 11.8% in 2026 and 9.1% in 2027.
File photo by Freddy Mavunda/Gallo Images
Political parties, environmental organisations and ratepayers expressed solidarity with informal dweller movements, Abahlali baseMjondolo and the Ubumbano lamaHostela, on Thursday after they disrupted the National Energy Regulator of South Africa’s (Nersa) public hearings into Eskom’s application for a 36.1% electricity tariff hike.
This was after Nersa at the last minute changed the venue for the hearings from the Transnet National Ports Authority’s N Shed at the Port of Durban to the Royal Hotel in the city centre.
More than 250 people crammed into the venue where Eskom chief financial officer Calib Cassim and generation manager Eric Shunmagum gave presentations on the power utility’s financial and generation performance to motivate for its application under the sixth multi-year price determination (MYPD).
Cassim said Eskom’s request amounts to R445 billion for 2025-26, R495 billion for 2026-27 and R537 billion for 2027-28, translated to electricity price hikes of 36.1% in 2025, 11.8% in 2026 and 9.1% in 2027.
If approved the price increases will be effective from 1 April 2025 for Eskom customers and 1 July for municipal ones.
Cassim said Eskom needed the increases to deliver services and maintain infrastructure, adding that the utility’s asset base had increased over the current MYPD decision for 2025 from just under R990 billion to R1.066 billion. As more assets are added during the course of the next three years this will rise to R1.2 trillion in 2028, he said.
“What we are seeing with this application is that due to the delays in IPPs (independent power producers) being connected to the grid it meant more production was required by the generation plant,” Cassim said.
“We need to address the issue of municipal debt and non-payment. It is currently sitting at R90 billion which is clearly unsustainable. And through the government, Salga [South African Local Government Association] and the treasury that issue needs to be addressed. Currently between R1 billion and R1.5 billion a month is not being paid over to Eskom.”
He said Eskom’s balance sheet could not sustain its current debt of R400 billion, which had to be reduced to about R250 billion. At the end of the debt relief window, which ends in March 2026, the cumulative support Eskom would have received from the government was R496 billion
“Treasury has indicated that there is no more room for further support whether in the form of guarantees or further equity support. We would need to be in a position to go to the market on the strength of our own balance sheet,” he said.
Eskom senior manager Eric Shunmugam highlighted the successes of Eskom’s generation recovery plan that aims to recover 6000 megawatt capacity over a three year period.
“In terms of the recovery strategy, there is a conscious decision that was made by the board … that we will focus on maintenance and get back to basics, get competent staff, remove substandard contractors and do what we have to do to bring back reliability,” he said.
Shunmugam said the power utility’s energy availability factor was about 54% when the new board took over and this had improved to about 65%. He said the power utility had saved R15 billion in reduced diesel usage over the 2023-24 year.
Just as Thursday’s presentations were completed and members of the public inside the venue started asking questions, about 100 Abahlali Base Mjobdolo and Ubumbano lamaHostela members arrived, demanding to be allowed inside. Tempers flared as security officials barred the new arrivals from entering the already overcrowded room.
Natural Justice representative Desmond D’Sa stepped outside to try to calm the crowd.
He later told the Mail & Guardian: “Nersa plays games with people. Nersa, don’t play games with human beings. Come out openly and be factual, don’t come here and … undermine the public participation process where we all have a right to come here and talk and present our facts about an electricity price increase that will destroy not only Durban but the province and the country as a whole.”
Ubumbano lamaHostela representative Vusi Zweli said the issue of electricity prices “goes hand in hand with unemployment and poverty” and the proposed hikes would put the country into “dire straits”.
He denounced the late change to a smaller venue.
eThekwini Ratepayers Protest Movement chairperson Asad Gaffar said the hearings were poorly planned.
“I don’t think Nersa was expecting such a turnout. Usually these events are very hush but the community obviously came prepared. And this is the temperature on the ground, people are upset that they were not allowed inside this venue to express their concerns, and more especially that electricity tariffs keep continuing to increase and it is becoming unaffordable,” Gaffar said.
“They are not happy about this tariff increase and Nersa must take that into consideration.”
Nersa electricity hearing chairperson Nomfundo Maseti said the meeting had started “smoothly” before the disruptions.
“Unfortunately the size of the venue is smaller than the amount of people outside. As a result of that we decided to suspend today’s meeting so we can find a way to accommodate all of the people who came through,” she said.
“We will communicate to the members of the public when the gathering is going to take place.”
Democratic Alliance representative and uMngeni mayor Chris Pappas, who was scheduled to present at the hearings, said he wondered whether this was “just a tick box exercise by Nersa”.
“You have a province of over 12 million people that are geographically dispersed. You have two days of hearings and at short notice they change the venue in the first place and then you have a venue that is too small in a luxury hotel,” he said.
The public hearings are being held in all nine provinces until 4 December and Nersa’s final decision is expected on 20 December.