South Africa’s power utility, Eskom will be allowed to increase the tariffs on electricity by almost 10%, however, this is not what they were hoping for.
Eskom was seeking to increase electricity tariffs by 20.5%, however, the National Energy Regulator of South Africa (NERSA) has only granted a 9.61% increase.
Eskom spokesperson Sikonathi Mantshantsha says the power utility has noted the decision from NERSA.
He has added that Eskom’s board of directors will deliberate before deciding on how to continue to sustainably provide electricity to the extent possible in the context of this revenue decision.
Mantshantsha said, “In addition, Eskom keenly awaits the reasons for the decision that will provide further details on how the revenue determination was arrived at”.
Energy expert Chris Yelland says NERSA had to find a balance between the needs of consumers and the sustainability of Eskom.
Yelland adds that when Eskom does not get the increases they require, they will need bailouts from the government.
Earlier this week Finance Minister Enoch Godongwana revealed that National Treasury is working on a sustainable solution to deal with Eskom's debt.
The Minister warned that this must be done in a manner that is equitable and fair to all stakeholders.
Godongwana said, “Any solution will be contingent on continued progress to reform South Africa’s electricity sector and Eskom’s own progress on its turnaround plan and its restructuring”.
To date, Eskom has been provided with R136 billion or pay of its debt, with a further R88 billion until 2025/26.
Consumers will feel the pinch when the increases are factored into the price of electricity at the beginning of April 2022.
