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Eskom tariff hike of more than 20% unlikely, analyst reckons

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nersaBL Premium reports that South Africans who have this year already endured multiple interest rate increases, persistent high inflation in essentials such as food and fuel, and the worst load-shedding in Eskom’s history, must prepare for another cost-of-living shock when next year’s electricity tariff increase is announced on Wednesday.

The National Energy Regulator of SA (Nersa) is expected to announce a “draft” decision on Eskom’s revenue application for the next two years at an energy regulator meeting. After revising its tariff application for 2023/2024 and 2024/2025, which was part of Eskom’s fifth multiyear price determination (MYPD5) originally submitted in June 2021, the state-owned power utility is now seeking annual standard tariff increases of about 32% in 2023 and 9% in 2024. Nersa approved a 9.6% increase in the standard electricity tariff for 2022/2023 (the first year of the MYPD5), which came into effect in April. The increase was about half of what Eskom requested. Independent energy analyst Clyde Mallinson advised that it was unlikely that Nersa would approve a tariff increase in excess of 20%. But, what the tariff increase would ultimately decide was the size of the bailout Eskom would need from the government, given that it had argued at the public hearings that even if electricity rates were to increase by 32% next year, the tariff would still not be cost-reflective. “A larger increase [in the tariff] will mean Eskom will need a smaller bailout, and a smaller increase will mean they will ask for a larger bailout,” Mallinson pointed out.

  • Read the full original of the report in the above regard by Denene Erasmus at BusinessLive (subscriber access only)


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