How much you’ll pay for electricity next year

Nersa announced last week that it has approved the regulatory clearing account (RCA) for Eskom, allowing it to recover R7.82 billion in revenue.

The RCA is a regulatory mechanism that allows Eskom to adjust for over-or under-recovery of revenue, as initial price determinations are based on projections and assumptions.

According to energy consultancy firm, NUS, the recovery of almost R8 billion could see electricity prices increasing by as much as 14% in 2015.

Eskom was previously approved to increase the price of electricity in 2015 by 8%, which would have seen prices at R0.70/kWh off the current average selling price of R0.65/kWh.

Eskom sells 200,000 GWh of electricity a year (200 billion kilowatts), the NUS noted.

Thus, in order to recover the R8 billion approved by Nersa, customers are likely to be charged an additional 4 cents per kilowatt to recoup that amount.

With this RCA recovery factored in, this would push the price of electricity up to R0.74/kWh in 2015 – a 14% jump.

Eskom initially sought approval to recover R18.3 billion, which would have translated to a 9 cent increase, or R0.79/kWh – a 22% leap.

Price (per kWh)
Increase %
Current average R0.65
Scheduled increase R0.70 R0.05 8%
Nersa-approved recovery R0.74 R0.09 14%
Eskom wanted R0.79 R0.14 22%

Eskom has been asking for an equity injection of at least R50 billion to solve its cash-flow problems.

The power utility has painted a gloomy picture of its books, telling MPs it faced a R225 billion revenue shortfall, partly as a result of being granted lower-than-expected tariff increases by Nersa.

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How much you’ll pay for electricity next year