Nersa’s mistakes turn 5.36% tariff increase into 8.76%

Not just this year – tariffs are expected to go up 8.83% instead of 6.19% next year, with even more hikes to be carried over to future years. Picture: Moneyweb Consumers’ fears came true this weekend when energy regulator Nersa confirmed that Eskom’s average tariffs will increase by 8.76% this year, instead of the 5.36% initially announced more than a year ago. This follows the redetermination of Eskom’s revenue to correct earlier mistakes made by Nersa.

The increase will take effect on 1 April for those buying electricity directly from Eskom and on 1 July for municipal customers. Next year, the increase will amount to 8.83% instead of the initial 6.19%, as the additional R54 billion in revenue Nersa awarded Eskom over the weekend is phased in. A further R19.7 will be carried over to future increases.

Moneyweb has also established that another R40 billion, related to an earlier settlement between Eskom and Nersa – also the result of mistakes made by Nersa – will be rolled over to future tariff increases. This will make the promises made by Electricity and Energy Minister Dr Kgosientsho Ramokgopa, of electricity hikes slowing down, difficult to keep. On an average cents-per-kWh basis, the additional increase this year will add about 7.5c to every unit of electricity consumed, bringing the price to 240.28c/kWh.

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This comes as Nersa stuck to the R54 billion in additional revenue it agreed with Eskom during an earlier secret settlement. The settlement, which Nersa only disclosed after Moneyweb reported on it, stirred outrage among residential, commercial and industrial customers, who are already struggling to make ends meet against the backdrop of consecutive above-inflation increases in electricity tariffs. AfriForum and Minerals Council SA opposed an application to make the settlement an order of court.

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