Nersa approves 12.74% tariff increase for Eskom direct customers

Ratepayers are concerned about the National Energy Regulator of South Africa (Nersa) approving a 12.74% tariff increase for Eskom direct customers for the 2025/2026 financial year.

The announcement was made on Monday, and the changes in the tariff increases are expected to be implemented by 1 April 2025.

Nersa said that it considered and approved the Eskom Retail Tariffs and Structural Adjustment (ERTSA) application with an average tariff increase of 12.74% for Eskom direct customers and 11.32% for municipalities.

“The approved standard tariff increase of 12.74% will be implemented on 1 April 2025 until 31 March 2026 for Eskom direct customers, and the 11.32% increase will be implemented on 1 July 2025 for municipal customers,” it said.

The energy regulator added that the difference in percentage was brought about by the difference in the implementation dates of Eskom direct customers and municipalities buying from Eskom.

“According to the ERTSA methodology, Eskom must recover the full allowed revenue within its financial year, which is from April to March.”

Ish Praladh, chairperson for eThekwini Ratepayers and Residents Association (ERRA), said on Wednesday that the increase was definitely going to hurt the pockets of the poor and ratepayers/residents as well.

“Originally it was about 26% but we expected a single-digit increase, but unfortunately we have to cater for this now,” Praladh said.

Asad Gaffar, chairperson for eThekwini Ratepayers Protest Movement (ERPM), said they were aware that the 12.74% would get approved, adding that the cost of electricity was beyond the reach of many.

“The increase, in our opinion, cannot be justified. Ratepayers are facing incremental increases due to mismanagement and corruption,” he said. “Many elderly and pensioners are struggling to make their municipality payments.”

Tristan Meek from the South Durban Community Environmental Alliance (SDCEA) said that they believe that a 12.74% tariff increase was unlikely to be seen as fair, especially for already burdened communities.

“South Durban is home to many low-income households and marginalised communities who are already struggling with high living costs, unemployment, and the health impacts of industrial pollution.”

Meek added that such a significant increase in electricity tariffs will exacerbate financial strain on these communities, making basic services even less accessible.

Allison Schoeman, vice chairperson for the Bluff Ratepayers and Residents Association (BRRA), said that the people of South Africa have been betrayed once again.

“The latest announcement by Nersa confirming Eskom's 12.74% tariff hike for direct customers.is another nail in the coffin for an economy already on its knees,” Schoeman said.

“This is on top of the recent VAT increase, the looming tariff hikes by eThekwini Municipality, and the never-ending cascade of financial burdens placed upon ordinary citizens.” 

Power and energy expert, Prof Vally Padayachee, said that the approval of a 12.74% tariff increase for Eskom by Nersa was a significant decision that reflected the ongoing challenges faced by the electricity sector.

“This increase, though in my opinion not enough, does put a tight squeeze to assist Eskom to inter alia recover its costs, and it does go a reasonable way to maintain its operational and financial efficiency,” he said.

“However, it is crucial to acknowledge the impact of such increases on customers and the economy at large. Whilst the tariff increase is necessary for Eskom's financial sustainability, it also highlights the urgent need for a comprehensive power and energy strategy that addresses not only the pricing structure but also the long-term reliability and sustainability of energy supply in the country.”

Padayachee said that the 12.74% tariff increase will likely have a direct impact on all customers, leading to increased electricity costs for households and businesses.

Ruse Moleshe, managing director of RUBK, an energy and infrastructure consulting and advisory company, said that the approval of electricity tariff increases by Nersa was lower than Eskom expected, which meant the regulator was trying to balance the requirement for Eskom to be sustainable with the needs of consumers.

“The cost of electricity also impacts the broader economy, through price increases which have negative consequences for our competitiveness as a country,” Moleshe said.

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