A significant electricity price hike is expected in South Africa.
The energy regulatory body, Nersa, has stated that it will make a decision on Eskom’s request for a 36% price increase by the end of January 2025.
Originally, this decision was expected by the end of December, but the hearing period was extended, and further clarifications were required, which led to the delay.
Eskom has not only requested a price hike for next year. The proposed increases include 36.15% on April 1, 2025; 11.91% on April 1, 2026; and 9.1% on April 1, 2027, meaning a total increase of 66% by 2027.
Following this application, civil society organizations and the South African public have voiced significant opposition.
Eskom has stated that these price hikes are necessary to reflect the true cost of electricity. Due to issues such as electricity theft and non-payment of bills, Eskom explained that the increase is required to cover the losses, adding that municipal debts have reached over R100 billion.
Eskom officials further added:
“To eliminate the need for further government support, our financial sustainability is vitally dependent on obtaining appropriate allowable revenue decisions from Nersa towards a more cost-reflective tariff path that includes a fair return on assets, arresting the escalating municipal arrear debt, and supported by a continued focus on cost efficiencies.”
Many experts have warned that this price hike may not go through, and if it does, the South African public will struggle to cope with it.
They predict that social unrest will increase and believe that the price hike should be more reasonable to prevent these issues.
Nersa will announce its final decision in January 2025, taking all variables into consideration.