Cape Town - Electricity bills will be going up from April 1 this year after the National Energy Regulator of South Africa (Nersa) granted embattled power utility Eskom an 18.65% tariff increase, and a further 12.74% hike next year.
The increase is 40% less than Eskom had requested.
Eskom, which implemented nonstop Stage 6 load shedding on Tuesday, had motivated for a 32% hike in electricity tariffs for the 2023/2024 financial year.
Making the announcement, Nersa chairperson Thembani Bukula said Eskom’s revenue application for the years 2023 to 2025 was considered during a time of severe challenges with economic growth and was expected to affect the South African economic activity in the short, medium and even longer term.
The tariff increase is applicable to Eskom’s direct customers and will come into effect in April, while the increase for municipal customers will only be implemented on July 1, 2023.
Municipalities now have an opportunity to apply for a tariff increase and are likely to add a surcharge for their clients.
Reaction to the price hike was swift and angry with Cape Town mayor Geordin Hill-Lewis calling Eskom’s Nersa-approved 18.65% price hike “unfair, unaffordable and unjust”.
Hill-Lewis said “South Africans are being asked to pay for corruption and mismanagement at Eskom.”
He said Eskom had alternative ways to raise funds and suggested the utility reduce its “bloated payroll by cutting suppliers who are over-charging, especially for sub-standard coal, and by ending corruption, including recovering state capture loot”.
He said the City was working flat out to end Eskom reliance, diversify energy supply to more affordable power sources, and end load shedding over time.
Approximately 70% of the City’s income from the sale of electricity went toward buying bulk electricity from Eskom, and the remaining 30% ensured a reliable electricity service and healthy grid infrastructure.
Agri Western Cape chief executive Jannie Strydom hinted at prices of agricultural products rising and said: “The energy needs of farming operations remain the same irrespective of the electricity tariff.
“Producers are now forced to invest in alternative sources of electricity, which requires enormous capital."
GOOD Party MP Brett Herron said the increase was a bitter pill to swallow.
“For consumers, residential and business, it’s a triple whammy. The inability of Eskom to provide a continuous electricity supply has serious economic consequences and now we must pay more for what little we get.
“Then there is still the municipal mark-up on electricity tariffs. Municipalities are over reliant on profit-making from electricity sales to balance their budgets.”
Trade union Solidarity said Nersa should pay more attention to applications from private power generators and less attention to Eskom’s applications for more expensive power.
Solidarity Research Institute (SRI) economics researcher Theuns du Buisson said Eskom’s increasing debt and its dropping power supply currently pose the single biggest threat to the South African economy.
He said: “The false choice of either Eskom getting the tariff increase or of it being dependent on even more bailouts is being presented to South Africa on an ongoing basis, but the fact remains that we see both of these harmful concessions being made every year,”
SACP spokesperson Alex Mashilo said the tariff hike would be “an additional albatross on the working class and poor, who already face a growing list of impoverishing burdens on their necks”.
Meanwhile, yesterday (Thursday) Premier Alan Winde hosted the first meeting of his newly-established energy council.
The body seeks to make the province energy resilient.
Former Eskom manager Alwie Lester, who has been appointed as an energy advisor in the Office of the Premier, was also officially introduced to other council officials.
Winde said: “The urgency needed to address this catastrophe is painfully absent from the national government.
“The Western Cape has to become independent of Eskom as quickly as possible.”