Rising electricity tariffs: South Africans are now paying 307% more

The National Energy Regulator of South Africa (Nersa) confirmed during a media briefing on Thursday that Eskom will be allowed to increase electricity tariffs by 9.6%. 

Eskom had initially requested an increase of 20.5% for the 2022/2023 financial year. 

In the current application for the next three financial years (MYPD5), Eskom based its calculations on a regulatory asset base (RAB) of R1.263 billion, following a revaluation. 

Rising electricity tariffs

While the South African Local Government Association (Salga) welcomes the announcement, it pointed out that the price of electricity has risen by 307% over the past 13 years. 

The tariff increases far exceed inflation, especially since South Africans have experienced unreliable electrical supply for at least 15 years – rolling blackouts (also known as load shedding) was first introduced in January 2008. 

During Nersa’s public hearing, Salga said Eskom’s proposed increases “are unrealistic and unsustainable and go against economic and social issues currently affecting the South African economy”.  

Eskom debt

Salga called on Eskom to conduct its business consistent with the government’s economic objectives and said a “holistic restructuring of the electricity industry” is needed.  

Municipalities are already confronted with insurmountable challenges of high non-payment with businesses, government, and households collectively owing over R300 billion for service rendered.

The new tariff increase will be in effect from 1 April 2022 for Eskom customers and municipalities; and from 1 July 2022 for municipal customers. 

ALSO READ: Bad news for you, worse news for Eskom – Nersa caps tariff increase at 9.61% 

Municipal debt

Back in November 2021, Eskom suspended electricity supply to Diepkloof Zone 3 due to “high energy losses as a result of illegal connections, meter bypassing and buying electricity from ghost vendors”. 

Eskom said it would reconnect supply when residents pay back approximately R6,000 per household. Residents, however, said they cannot afford to pay “the unrealistic Eskom fine”. 

Meanwhile, Eskom claims the City of Tshwane owes it R635 million.  

The power utility said the “overdue debt has contributed negatively to the liquidity, financial performance and sustainability of the organisation, where Eskom has to borrow to meet its financial commitments”.  

Eskom is currently more than R43.8 million in debt itself. 

ALSO READ: Eskom confirms plans for municipalities to take over debt-ridden townships