Your electricity bill will double in two years, says expert

Nersa approved electricity hikes of 9.41%, 8.1% and 5.2% for the next three financial years.
Nersa approved electricity hikes of 9.41%, 8.1% and 5.2% for the next three financial years.
Image: Eskom

Should Eskom win a court battle against the National Energy Regulator of SA (Nersa), South Africans face the prospect of paying double within two years for electricity.

This is according to the Energy Expert Coalition (ECC), which has launched a campaign to stop Eskom hiking tariffs. 

Eskom applied for increases of 17.1% for 2019/20, 15.4% for 2020/21 and 15.5% for 2021/22. In March, Nersa approved electricity hikes of 9.41%, 8.1% and 5.2% for the next three financial years, far below Eskom’s application for double-digit tariff increases. Eskom said the decision had left the company with a shortfall of R102bn.

According to energy expert Ted Blom, should Eskom succeed, there would be a 45% jump on current tariffs.

“However, as the increase is over and above their annual tariff hikes, in reality, your electricity costs will double within two years,” Blom said.

The embattled power utility said it would challenge the energy regulator's tariff increases in court.

Eskom said the key reason for the shortfall was Nersa’s decision to offset the envisaged government support of R23bn a year, which was referred to in minister of finance Tito Mboweni’s budget speech, against the return on assets.

The power utility said this had resulted in the return on assets being about -1% for each of the financial years.

It said this was far below a reasonable return and worsened Eskom’s financial sustainability. 

“Consequently, we have put in an application for urgent interim relief, which is necessary to avoid financial disaster for Eskom. We are seeking an order to address this shortfall in a phased manner,” said Eskom CFO Calib Cassim.

He said Eskom wanted the court to review and set aside Nersa’s revenue decision and resubmit it to the regulator for reconsideration.


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