Eskom are set to hike electricity prices by 12.74%. (Waldo Swiegers/Bloomberg via Getty Images)
South African consumers who are already struggling with the rising cost of living will have to fork out an additional 12.74% for electricity when Eskom’s tariff hikes take effect in the coming months.
The National Energy Regulator of South Africa (Nersa) said on Thursday it had approved revenue for the power utility of R384 610 million for 2024-5, R409 524 million for 2026-7 and R436 860 million for 2027-8, translating to price increases of 12.74%, 5.36% and 6.19%, respectively.
Eskom had asked the regulator for R445 563 million, R495 355 million and R536 778 million for the 2025-26, 2026-27 and 2027-28 financial years, respectively. Based on the power utility’s application, the proposed tariff rises were projected at 36.15%, 11.81% and 9.10% for the three years.
Announcing the decision, Nersa chairperson Thembani Bukula said the regulator had conducted an assessment of Eskom’s proposal to ensure compliance with the multi-year price determination methodology and had sought public comment in roadshows across the country.
He said the regulator had also received more than 1 200 written responses from civil society groups, government departments, business, political organisations, environmental activists and trade unions.
“We received valuable insights and feedback on several key themes, including affordability, Eskom’s performance, the impact of negotiated price agreements, municipal debt and the need for better consultation by Eskom and municipalities,” Bukula said.
“This decision is not taken lightly. The energy regulator recognises the challenges consumers face and the importance of ensuring that electricity remains affordable while securing Eskom’s financial sustainability.”
The regulator was faced with the challenge of regulating the energy industry in a manner that balances the interests of producers on the one hand and consumers on the other.
“This is never an easy task for, inevitably, it is influenced by the greater economic environment, both locally and internationally, and as directed by the policy environment of the government,” Bukula said.
Nersa said the increases, which are substantially less than what Eskom had applied for, would have a positive effect on the South African economy and a significantly lower impact on consumers.
“It is anticipated that the overall impact of a more positive revenue outcome, buoyed by proactive regulatory instruments, should improve investor confidence to sustain, and possibly increase, production, which should translate to increased economic growth and stimulate electricity demand,” the regulator said.
Eskom could not be reached for comment at the time of publication.