Eskom’s 19% price hike gets final approval — with bad news for urban and industrial customers

The National Energy Regulator of South Africa (Nersa) has granted final approval for Eskom to implement an 18.65% average electricity tariff increase.

Nersa said it made its determination on Eskom’s Retail Tariff and Structural Adjustment application at a meeting held on 10 March 2023.

It also revealed that Eskom submitted a revised application on 2 March 2023 with a lower increase for Homelight 20 Amp customers.

Eskom Homelight 20A customers will only see a 10% increase.

Environmental activist organisation Project 90 by 2030 says Eskom generally supplies Homelight 20A to informal settlements and Homelight 60A to private households.

Eskom’s Homelight tariffs are partly-subsidised and don’t have any capacity charges.

Capacity charges are fixed monthly fees other Eskom customers pay for their grid connection.

While Homelight 20A customers will see a much lower price increase, Nersa approved a 29.53% increase for key industrial and urban customers.

“Key industrial and urban customers will realise an 18.65% increase plus an additional 7.37c/kWh to cater for the subsidy, which increases from 5.69c/kWh resulting in a 29.53% increase,” it stated.

Nersa approved an 18.49% tariff increase for municipalities.

It explained that municipalities would realise a lower increase than Eskom’s because of a mismatch between financial years.

Eskom’s price increase kick in when its new financial year starts in April, but the municipalities may only increase their prices in July.

“In the first three months (April to June) of Eskom’s financial year, they will not experience an increase, as their financial year commences on 1 July every year,” Nersa explained.

“The municipalities cannot increase their tariffs in the middle of their financial year, as it would not correspond with the revenue to be achieved from licensed municipal distributors.”

Nersa noted that its approved tariffs exclude value-added tax, which the government currently has at 15%.

The table below summarises Nersa’s approved retail electricity tariff adjustments for the 2023/24 financial year.

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