Opposition parties said yesterday that the 18.65% Eskom tariff increase approved by the National Energy Regulator of SA (Nersa) would place a tremendous financial burden on South Africans.
Eskom had initially asked for a 32% increase, despite the fact that South Africans have been faced with above-inflation tariff increases for the past five years. Nersa said yesterday that it had approved an 18.65% electricity tariff increase for 2023/2024.
“Nersa has approved a total revenue of R300 billion for the 2023/24 financial year, which translates to a tariff of 173.80c/kWh. The percentage increase is 18.65% based on Nersa’s approved tariff of 146.48c/kWh in the 2022/23 financial year.”
The DA’s Ghaleb Cachalia described the increase granted to Eskom as absurd, especially as the country grappled with Stage 6 load shedding.
“We are asking people to pay more for power they do not have. We are propping up a shell of Eskom that does not work and asking people to pay more to an entity that does not make financial sense,” said Cachalia.
He said this increase would have an impact on people who were battling the rising cost of living, and Eskom’s crisis would cause businesses to close.
Cachalia described the tariff hike as “officially sanctioned daylight robbery against consumers”.
He said that DA leader John Steenhuisen had yesterday written to President Cyril Ramaphosa, requesting an urgent meeting with him about Eskom and the growing power crisis.
“The party will explore the option of mass action against the incapable ANC-led government.”
He said Nersa had essentially abdicated its statutory obligation to “protect consumers from unfair energy pricing and, instead, pandered to the corporate interests of an entity that has completely failed to generate enough electricity to meet demand”.
IFP leader Velenkosini Hlabisa described the increase as unfair, saying small and big businesses and communities were reeling from the impact of load shedding.
“We are now paying more for something which is a daily inconvenience for us,” Hlabisa said.
UDM leader Bantu Holomisa described the increase as ridiculous.
“Where is this money going to? Is it being used to upgrade systems? They must tell us what these increases over the years have been used for and how they have benefited South Africans.”
Action SA leader Herman Mashaba said South Africans who were already battling high inflation, declining public services and escalating food prices, now had to contend with an exorbitant increase.
“A feasible solution has to be pursued because the South African ratepayer cannot continue to pay for historical and persistent mismanagement of our power utility.”
With Nersa announcing the tariff increase, the focus will now turn to Finance Minister Enoch Godongwana and how National Treasury will offset Eskom’s R400 billion debt so the utility can focus on dealing with the energy crisis.
During his medium-term budget speech last year, Godongwana said reducing Eskom’s debt would ease financial pressure on the utility, enabling it to implement a viable unbundling process, and freeing resources for investment in critical electricity supply and transmission infrastructure.
Godongwana said the government could take at least two-thirds of Eskom’s R400bn debt as part of a comprehensive approach to address the utility’s financial challenges.
Taxpayers will have to wait until next month’s Budget speech to get the full details of this takeover and how this would have an impact on public finances.
Energy expert, Roger Lilley, said in an interview that a large portion of Eskom’s income goes to servicing its debt.
“Some R70 billion every year is sliced off the top and goes straight to pay this debt. Earlier last year, the minister of finance said perhaps Treasury would help in some way. We are not sure if they will take all or part of Eskom’s debt off Eskom’s balance sheet, but certainly it would make a big difference.”
He warned that load shedding could get worse. “As more and more equipment fails, a greater load is passed on to the equipment that is running.
“The Department of Energy needs to come to the party and provide us with additional generating capacity so that we can avoid any further load shedding stages, or a collapse of the system. It is really getting very serious now.”