Eskom has announced that the price of electricity in South Africa will increase from 1 April 2021.
This is as a result of three decisions made by the National Energy Regulator of South Africa (Nersa), which Eskom said will bring electricity prices more in line with the cost of producing energy.
“The National Energy Regulator of South Africa has made three decisions that are envisaged to increase the average price of electricity from 1 April 2021,” said Eskom general manager for regulation Hasha Tlhotlhalemaje.
“These decisions all refer to efficient costs as has been determined by NERSA incurred as far back as 2014.”
The regulator announced that it will allow Eskom to recover an extra R6 billion following the review of previous decisions on electricity tariffs.
This amount will be recovered through price increases effected in April this year.
“The extent of the increase is yet to be determined by NERSA and it is hoped that this will happen by the end of February 2021,” Tlhotlhalemaje said.
If consumers don’t pay, taxpayers will
Tlhotlhalemaje said that the efficient costs for the production of electricity remain a salient issue for Eskom, adding that the power utility will either need to recoup these costs from users or taxpayers via the government.
“If consumers do not pay, then the taxpayer would need to have to pay,” she said.
“This negatively impacts other government priorities that the government is busy with at the moment.”
She also noted that indigent South Africans would be protected from these increases due to existing subsidies and free basic services.
“It needs to be noted that vulnerable sectors such as the poor residential customers are protected by particular subsidies as well as free basic electricity,” Tlhotlhalemaje said.
“Eskom prefers that the user pays for the electricity rather than being subsidised by the taxpayer.”
“The price of electricity is still migrating towards what is the efficient level to produce the electricity,” she said.
The decisions made by Nersa are as follows:
- The implementation of the FY 2019 regulatory clearing account (RCA) decision
- The decision on Eskom’s FY 2019 supplementary application made in accordance with the High Court judgement and order.
- The reviewed decision made on Eskom’s FY 2015 to 2017 RCA decision in accordance with the High Court judgement and order.