Even Eskom loses with the NERSA tariff hike decision

  • The price of a kWh of electricity will increase to R1.73 on 1st April 2023.
  • There is a further increase on the cards for 1st April 2024 when South Africans will pay R1.95 per kWh.
  • The increase comes with strict conditions Eskom must adhere to.

While in the midst of continuous Stage 6 loadshedding, the National Energy Regulator of South Africa (NERSA) announced a hike in the price of electricity.

Each year, Eskom presents a proposed electricity tariff increase based on the amount of revenue it needs to recover. This figure is based on Eskom’s performance in the previous year, this recovery is done through an increase in tariffs. However, in order to insure Eskom doesn’t increase the price of electricity as it wishes, this increase must be approved by NERSA.

On Thursday NERSA announced that for the 2023/24 financial year it approved a price increase per kilowatt hour (kWh) of 18.65 percent. This means that as of 1st April 2023, the price of electricity will go from R1.46 per kWh to R1.73 per kWh.

Next year for the 2024/25 financial year, the tariff will increase by 12.74 percent from R1.73 per kWh to R1.95 per kWh.

Make no mistake, this is bad news for cash strapped consumers who are facing rising inflation and interest rates while budgets remain the same. However, it could’ve been worse as Eskom had applied for a 32.17 percent and 22.52 percent increase for the 2023/24 and 2024/25 financial years respectively.

This would’ve seen South Africans paying R1.93 per kWh from 1st April this year and R2.12 per kWh from next year.

In addition to not being granted the tariff hike it applied for, NERSA has also attached “non-negotiable” conditions to the increase according to MoneyWeb.

These conditions include:

  • Open-cycle gas turbines may only be used as intended, for peak-time generation and emergencies,
  • Funds allocated for maintenance must only be used for such and ;
  • The percentage of generation capacity unavailable due to breakdowns must be lowered to 20 percent in 2023/24 and 18 percent in 2024/25.

Whether the regulator will be able to enforce these conditions remains to be seen.

Eskom is expected to respond to NERSA’s decision on Friday per a report from EWN earlier that morning.

This all makes for grim news on Friday the 13th and South Africans have been bemoaning the increases since they were announced on Thursday afternoon.

Stage 6 loadshedding continues unabated with no word from the utility as to when South Africans can expect respite.


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