The National Energy Regulator of South Africa (Nersa) has defended its decision to grant Eskom a 12.74% tariff increase below the 36.15% requested by the state-owned enterprise.
The regulator also approved increases of 5.36% and 6.19% for Eskom’s 2026/27 and 2027/28 financial years.
This, against applications for 11.8% and 9.1% respectively, made in Eskom’s sixth multi-year price determination application.
Speaking on You FM Newshour on Thursday evening after the announcement, Nersa’s acting Executive Manager for Electricity Welile Mkhize said the decision was justified.
“It was a difficult decision bearing in mind that it was probably one of the highest applications that Eskom has made to date for a 36.15% increase in the first year of the application.
So, we had to really scrutinise Eskom’s application in terms of the cost that they were presenting as a being efficient cost that they need to incur to continue supplying electricity to the country,” said Mkhize.
He highlighted that they had to cut down or adjust some of the power utility’s costs.
“Just to be factual the biggest downward adjustment was under operating costs, of course operating cost include maintenance, operations in terms of staff payments as well as other expenses that had to be incurred to produce electricity, emphasising the fact that Eskom need to be more efficient going forward.
Because our main concern was that Eskom will eventually price itself out of the market and become irrelevant, but we don’t want that, we want Eskom to continue being a central player in electricity supply industry,” explained Mkhize.
In addition, Mkhize said Eskom is still expected to make a final pronouncement on whether it accepts or declines Nersa’s decision.
“Eskom has that prerogative to take up the decision for review as they have done in the past.
But of course, we’re confident that we have stayed within the confines of the law as well as the methodology that guides us in terms of what is lawfully allowed and what we can adjust and what we can disallow,” remarked Mkhize.
Meanwhile, the Energy Analyst from the South African National Energy Development Institute (SANEDI) Professor Sampson Mamphweli said he’s not taken aback by Nersa’s decision as it “carefully considered every aspect of both the public and Eskom’s inputs application on the matter.”
According to Mamphweli, there was no political pressure from the likes of the Electricity and Energy Minister Dr Kgosientsho Ramokgopa who previously described Eskom’s 36.15% request as unaffordable and untenable.
Eskom will hike the new price from 1 April.
