Massive electricity price hike for South Africa – D-Day is coming
Energy regulator Nersa says that it will make a decision on Eskom’s application for a massive 36% price hike before the end of January 2025.
The decision would have been made in December, but the deliberations were delayed due to an extended public hearing period, the information received and further clarification required, it said.
“Nersa understands the importance of this decision and remains committed to ensuring that all inputs received during the public participation process are considered.”
Eskom has applied for massive price hikes through 2027, which will effectively see prices climb 66% over the period.
This includes:
- 36.15% on April 1, 2025;
- 11.91% on April 1, 2026;
- 9.1% on April 1, 2027.
The application has been met with widespread backlash from municipalities, civil organisations and society at large, lamenting the impact of escalating electricity tariff increases on the cost of living.
At the group’s FY2024 financial results presentation last week, Eskom said that the massive tariffs are necessary so that it can move closer to a cost-reflective tariff that reflects the actual costs of supplying electricity.
It is also necessary due to the losses it has incurred from electricity theft and non-payment of bills, with its municipal debt heading to over R100 billion.
In effect, to remain a going concern, the group has to force paying customers to make up for non-paying customers, and this is a problem that has to be addressed urgently.
“To eliminate the need for further government support, our financial sustainability is vitally dependent on obtaining appropriate allowable revenue decisions from Nersa towards a more cost-reflective tariff path that includes a fair return on assets, arresting the escalating municipal arrear debt, and supported by a continued focus on cost efficiencies,” Eskom said.
Nersa has historically not granted Eskom the amounts it requested, which has led to the power utility continuing to apply for increasingly larger amounts.
Outside of Eskom’s financials, however, there has been wide rejection of the application in the public consultations, with many analysts and experts warning that households are at breaking points and further electricity price increases will lead to social unrest.
The government has also noted that the increases are unsustainable and untenable, with the minister of electricity, Kgosientsho Ramokgopa, alluding to some form of government intervention coming to soften the blow – especially for indigent households.
Nersa will announce its decision before the end of January 2025.
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