Nersa faces competing demands in considering Eskom’s proposed 20% tariff hike
If there are any conclusions to draw from the public hearings hosted last week by the National Energy Regulator of SA (Nersa) on Eskom’s proposal to raise tariffs by 20.5% for 2022/23, it would be that for both residential and industrial electricity users, such an increase will be unaffordable — but at the same time for Eskom a double-digit increase is necessary to keep the lights on and perform critical maintenance work.
One of the most direct impacts of a sharp electricity tariff hike will be on consumer inflation. According to Hugo Pienaar, chief economist at the Bureau for Economic Research (BER) — a research institute at Stellenbosch University — their bottom-up inflation model indicated that if there was, for argument’s sake, a zero tariff increase this year, headline CPI would average about 4.8% in 2022. With a 20.5% rise in the electricity tariff, CPI would move to an average of 5.3% in 2022. ..