Electricity to cost almost 20% more from April

The National Energy Regulator of South Africa (Nersa) has approved an 18.65% electricity tariff increase for this year and 12.74% for next year.

The increase, which kicks in on April 1, is more than double the inflation rate but almost half the 32% increase Eskom had asked for – still a substantial increase that electricity users will face.

Nersa said that the increase means that customers will have to pay 173.80c/kWh compared to the current 146.48c/kWh.

Next year, customers would have to fork out 195.95c/kWh.

Solidarity reacted to the increase by saying that the increase would do little to aid the energy crisis in South Africa.

“The time that Nersa spends every year to consider Eskom’s tariff increase application can be spent much better on policy review to allow new entrants to the power grid to supply their service. In the end, this is the only way South Africa would be able to emerge from the current energy crisis,” Theuns du Buisson, an economics researcher at Solidarity Research Institute (SRI), said.

According to Solidarity, Eskom’s rising debt and its dropping power supply currently pose the single biggest threat to the South African economy.

“The false choice of either Eskom getting the tariff increase or it being dependent on even more bailouts is being presented to South Africa on an ongoing basis, but the fact remains that we see both of these harmful concessions being made every year,” Du Buisson explains.

“At the moment, Eskom is caught up in a vicious cycle of supplying less and less power, thus wanting to ask more for the power that is indeed available. This is by no means sustainable though, and the only solution is to add more power to the grid – as soon as possible.”

Nersa said that its decision was based on written comments, of which about 2 000 letters raised concerns about affordability, as well as the various challenges affecting the South African economy.

The regulator said the decision provides a balance between the sustainability of Eskom and the economic well-being of the consumers and the economy.

Nersa said it would provide detailed reasoning for its decision in the coming days.

Organisation Undoing Tax Abuse (Outa) said that the increase would be a challenge for South Africans.

“Outa is outraged at the government’s failure to help South Africans weather this storm. In effect, the failure of government to fast track the independent power producer procurement programme has meant that excessive diesel is being consumed as Eskom is trapped in almost full-time use of the open cycle gas turbines to reduce load-shedding,” says Liz McDaid, Outa parliamentary and energy advisor.

“Nersa is driving in the right direction by pushing Eskom to fix its own house and should be commended for that. However, this is not enough to end the electricity crisis.”

Eskom has acknowledged that corruption adds to the breakdowns at the coal power stations, and McDaid said it is urgent to address this effectively.

“We also need a forward-looking energy minister who sees the value of renewable energy and fast tracks its implementation to get affordable energy onto the grid,” she said.

DA leader John Steenhuisen said: “Eskom’s electricity tariff increase of 18.65% must be rejected. This comes on the back of the ongoing stage 6 load-shedding that costs SA R4-billion a day. This will only worsen the cost of living crisis. I urge the President to meet with me to discuss a way out of this mess.”

The electricity tariff increase comes after the worst year on record for load-shedding with over 200 days of load-shedding in 2022.

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