There could be more bad news for cash strapped South Africans with massive electricity price hikes of up to 32% on the cards.
This comes amid the National Energy Regulator of South Africa (Nersa’s) impending announcement on how much it will allow Eskom to hike electricity prices for the 2023/24 and 2024/25 financial years.The announcement which is expected to take place on Thursday follows several delays by Nersa, which was supposed to make its final decision on Eskom’s application in November 2022.
Eskom applied for a 32% tariff hike in 2023, which, when added to court-ordered backlogs, could see electricity prices climb by over 38%.
The ailing power utility is looking to recover R351 billion through the tariff hike for 2023/24 and wants to recover R381 billion in 2024/25, Nersa said.
Nersa was given a reprieve from the pressure to determine Eskom’s tariffs after the High Court in Pretoria earlier ordered it to make a decision “on or before 24 December 2022”.
However, the subcommittee said it needed more time to decide on the increase and the court pushed the decision to 12 January 2023.
If Eskom’s fifth revenue application is granted, the 32% tariff increase will kick in at the start of April. The implications of another spike in electricity prices could be dire for South Africans already battling with excessive load shedding and a steep rise in living costs.
The December 2022 Household Affordability Index revealed that the average December food basket cost R577,24 more than it did in December 2021.
Electricity prices have increased by 735% in the past 10 years according to one SABC report.
10 Years ago, national demand was 32 000MW, that has now decreased to around 29 000MW as more people and businesses are turning toward self-generated electricity.
Eskom’s woes have also deepened with the delay of the tariff increase with the parastatal reporting that it was on track for a R20.1 billion loss in 2023 while it battles to keep the lights on.
Meanwhile, barely two weeks into 2023, South African are already roughing it with Eskom recording the highest number of generating unit failures at its power stations.
Eskom said on Wednesday the breakdown of eleven units has forced it impose load shedding stage 6 in the evenings until further notice. Stage 4 will continue to be implemented from 5am until 4pm daily.
By Faizel Patel, Senior Digital Journalist.