Johannesburg rejects Eskom’s demand for a 38,1% tariff hike
Environment and infrastructure services department
The multi-party government in Johannesburg rejects Eskom’s request to the National Energy Regulator of South Africa (Nersa) for a 38,1% electricity tariff increase for the 2023/24 financial year.
Environment and Infrastructure Services Department (EISD) MMC, Michael Sun and officials from City Power attended the Nersa hearings on behalf of the City of Joburg.
“Whilst as a city we have a full appreciation that Eskom must be financially viable, but this must not be achieved at the detriment of the residents of Johannesburg,” MMC Sun said.
“If Eskom’s proposed application of a tariff hike of 38.1% is approved, City Power would have little room but to pass through the costs to its customers. This would place further financial burdens on residents of the City of Johannesburg.”
The proposed tariff hike, which is far higher than the current inflation rate, would have a devastating impact on the residents of Johannesburg and the ailing local economy, further eroding business confidence and disrupting the city’s fragile economic recovery.
The multi-party government is of the view that Eskom has room to review and revise its proposed revenue down by R55b, by reducing the increase for the 2023/24 financial year to at least 18.4%.
The specific review of projected revenue needs to be conducted around Eskom’s Independent Power Producer (IPP) program, electricity imports, specifically from the Cahorra-Basse hydroelectric plant, carbon tax as well as battery power storage.
“This unrealistic tariff hike proposed by Eskom would put a halt to business and economic recovery and would negatively impact on job creation and the city’s revenue base,” Sun said.
Sun stressed to the Nersa panel that the fight against Eskom’s load-shedding blackouts is not just about keeping the lights on at homes. An astronomical amount of economic activities and productive hours are lost, resulting in a magnitude of financial losses to the economic hub of Africa which will take many years to recover.
“Therefore, we request Nersa to limit the increase to Eskom tariffs as suggested. Eskom should rather be encouraged to introspect and seek alternative mechanisms to improve its efficiencies and reduce costs.”
