These households will get relief from Eskom’s 18.65% electricity tariff hike

The National Energy Regulator of South Africa (Nersa) has approved a lower electricity tariff increase for low-income households — decreasing from 18.65% to 10% — meaning township residents and those living in rural areas won’t be as hard hit by the price hike.
However, municipalities will still pay the tariff increase on their bulk electricity purchases from Eskom, and it is unclear how they will recoup these costs.
“The announcement from Nersa is that they have revised their tariff increase from 18.65% to 10% for low-income households,” said StandUpSA founder Khustaz Mtwentwe in an interview with 702.
“From the first of April, low-income households will be paying 10% [more] instead of the 18.65%.”
It isn’t entirely accurate to say that Nersa revised the tariff increase downwards. According to Nersa, Eskom submitted a last-minute application for the lower increase on 2 March 2023, which it approved.
He explained that most of South Africa’s low-income households are in townships and rural areas across the country, with all townships set to benefit from the reduced increase.
“Soweto, for instance, is included. Thembisa is included. And other townships throughout the country will benefit from the 10%,” Mtwentwe said.
“The 18.65% will affect all suburbs and big users of electricity.”
“We are very happy with this [outcome]. This is a big win,” he added.
However, municipalities’ electricity purchases from Eskom will be subject to the 18.65% increase, and they will need to recoup that cost somehow.
“On the first of July, municipalities are going to increase [electricity tariffs] by 18.65%, and the 10% is for low-income households,” Mtwentwe said.
“Now, the next level is to deal with the municipalities because they will have to increase beyond just the 18.65% to cover their costs.”
While it is unclear how municipalities will recoup the costs of providing lower electricity tariffs to low-income households, Mtwentwe said they are responsible for ensuring the benefits are carried to these households.
“Eskom said that when Nersa applies these affordability subsidies, municipalities have the responsibility to take them over to their low-income households,” he said.
On 17 March 2023, Nersa granted final approval for Eskom to implement an 18.65% average electricity tariff increase.
While Eskom had submitted a revised application proposing a lower increase for Homelight 20 Amp customers, it also asked for a 29.53% increase for urban and industrial 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 said.
Eskom Homelight 20A — the electricity rates applied to informal settlements — will only see the 10% increase to which Mtwentwe referred.
Private households supplied with Eskom Homelight 60A will be subject to the 18.65% increase.
MyBroadband asked Eskom for further clarification on who constituted urban and industrial customers. It acknowledged our query but didn’t provide feedback.
Rather than answer our questions, Eskom issued a general statement to address the confusion around Nersa’s announcement. Unfortunately, Eskom’s statement didn’t clarify anything.
“The 2023/24 increase to the affordability subsidy for non-municipal large industrial and urban customers is 29.53% due to the growth in the subsidy to Homelight 20A tariff following only a 10% increase that is 8.65% lower than the average 18.65% non-municipal increase,” it said.
The table below summarises Nersa’s approved retail electricity tariff adjustments for the upcoming financial year.
Nersa-approved retail tariff adjustment 2023/24 | |
---|---|
Customer category | Average increase |
Total standard tariffs | 18.65% |
Municipal — 1 July 2023 | 18.49% |
Eskom Direct customers | |
Key Industrial & Urban: Megaflex, Miniflex, Nighsave Urban, WEPS, Megaflex Gen | |
Other tariff charges | 18.65% |
Affordability Subsidy (paid by industrial and urban Eskom customers) | 29.53% |
Rural: Ruralflex, Nighsave Rural, Landrate, Landlight, Rurafex Gen | 18.65% |
Homelight 20A | 10% |
Block 1 (0–350kWh) | 10% |
Block 2 (>350kWh) | 10% |
Homelight 60A | 18.65% |
Homepower | 18.65% |