- Eskom has requested a 20.5 per cent increase in tariff.
- Last July, municipalities saw a 17.80 per cent tariff increase.
City Power in Johannesburg has warned that Eskom’s planned 20.5 per cent tariff increase will be passed on directly to municipal payers and residents. Frank Hinda, City Power’s pricing and tariffs manager, told local radio station 702 that Eskom had applied to the National Energy Regulator of South Africa (Nersa) for a 20.5 per cent increase as part of an annual review. “We hope that Eskom does not receive the entire 20.5 per cent. As City Power, we did raise substantive objections to elements of Eskom’s application, some of which Eskom agreed with,” he said. “If granted to Eskom, then Nersa must calculate the increase that will apply to municipal customers.” According to our high-level assessments and historical data, a 20.5 per cent increase would result in a 17.5 per cent increase for municipalities.”
In its presentation to Nersa on 17th January, Eskom stated that the request for a 20.5 per cent increase was partly motivated by purchases from independent power producers (IPPs) and carbon taxes. According to the report, these two costs account for approximately 13.8 per cent of the requested increase. The group has also stated that it intends to request a 15.07 per cent increase in 2024 and a 10% increase in 2025. However, this will be dependent on the actual growth granted to Eskom by Nersa this year, as the regulator rarely gives the power utility the full amount requested.
Nersa approved a 15.06 per cent increase for Eskom’s direct customers on 5th March 2021, which was subsequently implemented on 1st April 2021. On 1st July 2021, municipalities saw a 17.80 per cent increase.
In addition to the requested tariff increase, Eskom stated that it is still reliant on additional equity support from the government to remain a going concern. However, it said that every effort is being made to find further efficiencies within the business, combat corruption and fraud, and make inroads into addressing municipal and other debt.