Electricity tariff increases will be staggered across socioeconomic divides

The National Energy Regulator of SA (Nersa) has confirmed an increase of 18.65% for Eskom’s standard tariff customers and 18.49% for municipalities, but explained that a subset of lower-income customers face a smaller increase. 

The increase for standard tariff customers will be effective from April 1 and for municipalities from July 1.

This is despite the plea in January by President Cyril Ramaphosa for the tariff increases to be suspended while the country endures high stages of load-shedding, the recent protest marches by civic organisations and objections from opposition political parties.

Eskom had received the go-ahead for the 18.65% increase in January, but went back to Nersa to discuss how to apply the increase across different socio-economic groups.

Lower-income customers in certain areas using lesser amounts of electricity will “ face a lower increase of 10%”.

To allow for this, industrial and urban customers pay an “affordability” subsidy, which increases from 5.69c/kWh to 7.37c/kWh resulting in a 29.53% increase in the subsidy paid. The general increase for key industrial and urban customers is  18.65%.

Explaining the lower increase for municipalities of 18.49%, Nersa said: “In the first three months (April to June) of Eskom’s financial year, they will not experience an increase as their financial year commences on July 1 every year.

“The municipalities cannot increase their tariffs in the middle of their financial year as it would not correspond with the revenue to be achieved from licensed municipal distributors.

“Eskom will over recover revenues in the first three months (April to June) of its financial year, hence municipalities will only experience an increase of 18.49% as opposed to the 18.65% the rest of Eskom’s customers will see.”

Nersa said the tariffs exclude VAT, which is 15%.

“Eskom will ensure its approved Schedule of Standard Prices for 2023/2024 is published on its website and communicated to all customers,” the regulator said.

TimesLIVE

Update: March 17 2023
Changes have been made to this article to clarify that the 29.53% increase mentioned is not the electricity tariff increase but that of the subsidy it will pay to alleviate the pressure on lower-income groups.