Eskom R4,500 electricity price pain

Eskom’s proposed price hikes for the next three years will mean that households that consume between 600kWh and 1,500kWh of electricity monthly will pay between R1,116 and R4,492 more per month in 2027 than they do now.

In a recent article, the Organisation Undoing Tax Abuse (Outa) highlighted that the proposed electricity price hikes equate to a roughly 66% increase over the next three years.

For reference, Eskom’s proposed tariff adjustments include a 36.15% hike in 2025, 11.81% in 2026, and 9.1% in 2027.

“Outa’s submission notes that these increases come on the back of massive revenue and price increases for Eskom over the past 15 years,” said Outa.

“Eskom focuses on ensuring cost reflectivity by increasing tariffs and revenue rather than by reducing costs and improving performance and efficiency.”

Eskom had implemented price increases of 18.65% in 2023 and 12.74% in 2024.

Outa said it had submitted its opposition to Eskom’s proposed price hikes to the National Energy Regulator of South Africa (Nersa).

“South Africa cannot afford this,” said Outa senior project manager Estienne Ruthnam.

“Our submission addresses significant concerns regarding Eskom’s proposed electricity price increases over the next three years, from 2025 to 2027.”

It highlighted several recommendations, including rejecting the proposed increases, focusing on cost reflectivity, and improving transparency and accountability.

The civil action organisation believes Eskom’s proposed hikes are too high and will exacerbate the economic burden, mainly because they exceed inflation.

It added that Nersa should push Eskom towards cost reductions in staffing, maintenance, and energy procurement rather than passing these costs on to customers.

Outa also proposed using independent studies on Eskom’s socio-economic impact, staffing levels, remuneration, and regulatory asset valuation. It said this would help provide a balanced view of Eskom’s costs.

Nersa received Eskom’s tariff adjustment application in August 2024, and the stakeholders had until 1 November to submit their comments.

The regulator will hold public hearings on the application from 18 November to 4 December. It expects to decide on 20 December 2024.

MyBroadband calculated how the combined 66% electricity price hike over the next three years would impact the bills of households consuming between 600kWh and 1,500kWh per month on average.

On Eskom’s Homepower 1, 2, 3, and 4 tariff plans, households pay the same rate of R2.82 per kWh, including VAT, when consuming up to 600kWh monthly.

These customers currently pay around R1,692 per month. If Eskom’s price adjustments are approved as-is, this figure would increase to R2,808 monthly.

However, the rates vary for customers who consume more electricity monthly. For reference, households who consume more than 600kWh per month pay R4.45 per kWh on Homepower 1, R4.35 on Homepower 2 and 3, and R4.54 on Homepower 4.

Based on these figures, households consuming 900kWh on average monthly pay around R4,014 on Homepower 1, R3,915 on Homepower 2 or 3, and R4,086 on Homepower 4.

If Eskom’s proposed price hikes for the next three years are approved as-is. Those on the Homepower 1 plan will pay R2,648 more per month, while those on Homepower 2 or 3 will pay R2,582 more per month.

Customers who consume 900kWh monthly on the Homepower 4 plan will pay R2,695 more in 2027.

Households that use more electricity, such as those consuming an average of 1,500kWh per month, will see their monthly bills grow to around R11,000.

Homepower 1 customers consuming 1,500kWh per month currently pay around R6,690. Their bills will increase to around R11,103 per month by 2027.

If Eskom’s proposal is approved, Homepower 4 customers consuming 1,500kWh per month will pay nearly R4,500 more in 2027 than they are currently paying.

The table below compares monthly energy costs for households that consume 600kWh, 900kWh, 1,200kWh, and 1,500kWh monthly in 2024 to what they will pay in 2027 if Eskom’s tariff adjustments are approved as-is.

We combined the Homepower 2 and 3 tariffs as they are similar.