Eskom price hikes incoming — how much more you will pay

Eskom is set to hike its electricity tariffs on 1 April 2024, and South Africans will see their monthly electricity bill increase significantly, with residential Homepower rates increasing by approximately 12.7% across the board.

The National Energy Regulator of South Africa (Nersa) approved a 12.74% electricity tariff hike for the 2024/25 financial year in January 2023.

Its approval came at the same time it approved last year’s electricity price hike of 18.65% — significantly less than the 32.02% increase Eskom asked for.

Combined, the two price hikes represent a 33.8% electricity price increase over two years.

Nersa said it had approved revenues of R318 billion for the 2023/24 financial year and R352 billion for the 2024/25 financial year. Eskom welcomed the decision despite hoping for more.

“The revenue determination of R319 billion and R352 billion for the financial years 2024/5 will allow a further migration towards a price level that reflects the efficient cost of producing electricity,” said Calib Cassim, chief financial officer at the power utility.

Nersa highlighted concerns over Eskom’s reliance on emergency generation capacity, specifically the burning of diesel in open-cycle gas turbines, and the power utility’s declining energy availability factor.

“Its coal burn rate is increasing, and yet we have a declining output from those plants,” said Nersa member Nhlanhla Gumede.

Eskom acknowledged the concerns and noted that it had tempered the volume of diesel for OCGT operation to a load factor of 6%.

“It is evident that both Eskom and Nersa are aligned that every effort needs to be made to improve the energy availability factor at Eskom power stations,” it added.

The price hike announcements received backlash, with the Democratic Alliance (DA) asking the High Court to intervene and stop the price hike.

It described the price hikes as “astronomical” and argued that it would make power unaffordable for many of South Africa’s residents.

“The DA rejects this astronomical increase,” the party said.

The South African Local Government Association (SALGA) was also involved in the legal challenge.

However, in December 2023, the High Court in Pretoria dismissed the application after it found in favour of Nersa.

“All relevant factors have properly and in detail been considered, the conclusions reached were neither arbitrary nor irrational and the issue of cross-subsidisation was considered at the appropriate stage,” the High Court judgement stated.

“The High Court, therefore, found that both the review applications of the DA and SALGA must fail.”

How much more homeowners will pay for electricity

MyBroadband calculated the monthly bill increases that homeowners will have to pay from 1 April 2024, for households with varying levels of electricity usage.

Our calculations were based on households that use an average of 600kWh, 900kWh, 1,200kWh, and 1,5000kWh of electricity per month.

Those who use 600kWh will pay R168.24 more per month, regardless of which Homepower tariff they’re on.

Households that consume 900kWh of electricity each month will see their costs increase by R398.52 on the Homepower 1 tariff, R388.53 on the Homepower 2 and 3 tariff, and R405.81 on the Homepower 4 tariff.

Residential properties that use 1,200kWh of electricity per month will see their monthly power costs increase by between R518.04 and R541.08, depending on the tariff for which they qualify.

Households consuming 1,500kWh will have to pay approximately R664 more per month on the Homepower 1 tariff, R648 on Homepower 2 & 3, and R676 for Homepower 4 users.

The table below compares monthly energy costs for households that use 600kWh, 900kWh, 1,200kWh, and 1,500kWh per month in 2023 to what South Africans will pay from 1 April 2024.

We combined the Homepower 2 & 3 tariffs into a single column as they are similar.