South Africa\u2019s parliament will debate a proposal from the nation\u2019s state-owned energy utility that could see electricity tariffs rise as much as 40% next year, according to the Democratic Alliance party.<\/p>\n\n\n\n
The party said that National Assembly Speaker Thoko Didiza confirmed officials would discuss the legality of the energy regulator\u2019s decision to allow Eskom to add an R8 billion \u201cmake-up tariff\u201d next year.<\/p>\n\n\n\n
According to leaked draft documents seen by the Daily Maverick in June<\/strong><\/a>, <\/span><\/span>Eskom would be seeking massive tariff hikes over the next three financial years:<\/p>\n\n\n\n These tariffs would apply to Eskom direct customers, with customers powered by local municipalities facing even higher rate hikes.<\/p>\n\n\n\n Notably, these increases do not include the additional amounts that energy regulator Nersa will allow the utility to \u2018claw back\u2019 from the Regulatory Clearing Account (RCA).<\/p>\n\n\n\n Nersa announced earlier in August that Eskom would be allowed to recover over R8 billion<\/strong><\/a> through the RCA from the 2021\/22 financial year.<\/p>\n\n\n\n Eskom applied for an RCA of R23.9 billion for the year, but the regulator approved just under R8.1 billion, adjusting R15.8 billion out of the application.<\/p>\n\n\n\n The RCA is an account in South Africa\u2019s current electricity tariff methodology that contains a balance between the actuals for Eskom\u2019s full financial year and what Nersa allowed for that year.<\/p>\n\n\n\n Under the MYPD methodology, Nersa allows Eskom to apply for future tariff hikes based on the costs of its operations as well as projected revenues from sales<\/strong>.<\/p>\n\n\n\n The RCA monitors and tracks uncontrollable costs and revenues assumed in Nersa-approved tariff hikes and compares them to the actual costs and revenues incurred by Eskom.<\/p>\n\n\n\n Even with Nersa nixing R16 billion from Eskom’s application, the R8 billion recovery would still translate to a 4% tariff hike on top of whatever hike is granted for 2025. If the draft proposals become official applications, the possible 36.15% hike could push above 40%.<\/p>\n\n\n\n It must be noted that Nersa has issued a statement<\/a> clarifying that no official applications have been made for 2025, 2026 and 2027 as yet.<\/p>\n\n\n\n However, there is no escaping the fact that massive price hikes are coming\u2014Eskom is entitled to R69 billion from the RCA due to a previous court ruling against Nersa, where the regulator excluded the amount and now has to put it back in the equation.<\/p>\n\n\n\n The first R23 billion was added to the 2021\/22 RCA for next year’s hikes. <\/p>\n\n\n\n Eskom has applied for only a R9 million clawback in the RCA for 2022\/23, but this does not include the second R23 billion tranche.<\/p>\n\n\n\n A third R23 billion tranche could be due in the 2023\/24 RCA, meaning even higher hikes in the medium term.<\/p>\n\n\n\n The reported hikes sparked an immediate backlash from electricity users and various stakeholders, which has led to the coming debate in Parliament.<\/p>\n\n\n\n Electricity prices have roughly tripled in South Africa over the past 14 years, even as sustained power cuts in Africa\u2019s most industrialised economy stagnated growth.<\/p>\n\n\n\n \u201cThe potential impact of a 40% electricity tariff increase is horrendous for South Africans already struggling under a cost of living crisis,\u201d Kevin Mileham, a DA member of parliament, said in the statement.<\/p>\n\n\n\n “If the regulator grants Eskom\u2019s request, the population will be forced to choose between buying food and making electricity payments,” he added.<\/p>\n\n\n\n Read: <\/a>Ramaphosa signs new electricity laws for South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" South Africa\u2019s parliament will debate escalating electricity price hikes in South Africa, including billions of rands in clawbacks from Eskom, and draft tariff hikes for 2025.<\/p>\n","protected":false},"author":59,"featured_media":680829,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9874],"tags":[20392,1164,853],"class_list":["post-787419","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-democratic-aliance-da","tag-eskom","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/787419","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=787419"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/787419\/revisions"}],"predecessor-version":[{"id":787426,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/787419\/revisions\/787426"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/680829"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=787419"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=787419"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=787419"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
\n\n\n\n