The electricity tariff hike allowed by the National Energy Regulator of South Africa (Nersa) is appreciated, Eskom said in its response to the decision.
On Thursday, after lengthy deliberations, Nersa decided to increase electricity prices by 18.65% for the 2023/4 financial year, signing off on R318 billion for the ailing utility.
The increase will come into effect on 1 April. Some customers will pay a tariff of R1.73 per kilowatt in the 2023/24 financial year, up from R1.46 per kilowatt.
Customers will then pay R1.95 per kilowatt in the 2024/25 financial year. Eskom Chief Financial Officer Calib Cassim said the decision would “positively contribute from a financial and sustainability point of view”.
“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,” Cassim said.
Eskom initially applied for a massive electricity hike in June 2021, amounting to a recovery of R351 billion from Eskom’s standard and non-standard tariff customers.
Eskom acknowledged the impact load shedding, currently on stage 6, had on consumers and businesses, and said that minimising load shedding was “the highest priority for Eskom”.
Eskom regulation general manager Hasha Tlhotlhalemaje said load shedding was owed to Eskom’s lack of performance and significant delays in independent power producer projects.
Tlhotlhalemaje said this needed to be addressed.
“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,” Tlhotlhalemaje added.
One of Nersa’s conditions when it granted the increase was for the utility to get ahead of its generating constraints.
“I don’t want to second-guess what will happen after that,” the regulator’s Nhlanhla Gumede said on Thursday.
Eskom said it was still awaiting reasons for Nersa’s “reconsidered capital-related costs”, which the utility said “significantly” contributed to allowing Eskom to recover costs related to debt commitments.
“It is hoped that Nersa has taken the direction given by the courts in previous judgements on related matters and that these have been correctly addressed.”