South Africans will be paying more for electricity this week as Eskom, the country's power utility, implemented a new tariff structure approved by the National Energy Regulator of South Africa (NERSA) in December 2023. The increases range from 12.72% to 12.74%, depending on the customer category.
Eskom Direct Customers, those who buy electricity directly from Eskom will face a 12.74% increase on most charges, effective 1 April 2024.
Residents who receive their electricity bills from municipalities will see an average increase of 12.72% starting in July 2024.
In addition to this, the Homelight 20A tariff, applicable to low-income households, will also see a 12.74% increase. To maintain affordability for these households, the affordability subsidy charge will rise by a steeper 25.24%. This additional cost is spread out among non-municipal large industrial and urban customers.
NERSA's approval considers Eskom's financial needs. However, the Democratic Alliance (DA) criticised the ongoing trend. They argue that the 405% cumulative increase in electricity tariffs over the past 14 years is crippling South Africans, forcing them to choose between keeping the lights on and putting food on the table.
While no major changes were made to the tariff structure this year, Eskom has indicated they might propose revisions for the 2025/26 financial year.
South Africans will be following these developments closely as it could mean they will have to dig deeper into their pockets to keep their lights on.
Energy Expert Vally Padayachee warned that prices could increase again as the price hikes won't cover the utility's costs.
Eskom is in dire straits. They have been getting significant bailouts from government and the costs have gone through the roof… although they got these tariff increases, which are quite high, it still has not covered their cost bases.
While acknowledging that the current tariff increase is high, Padayachee illustrated a shortfall in Eskom's cost bases. The 12% increment is also considerably less than the initial increase Eskom applied for.
Last year Eskom applied for 32%, for redress and they got 18%. This year they actually applied for 22%, so they actually applied for 54% in two years and with a 12,72%, this year, it equates to around 33%.
