SA's 36.1% power hike

METHODOLOGY: FLEXIBLE ENOUGH FOR POOR?

- Steven Matome Mathetsa

State-owned electricity company Eskom has applied to the National Energy Regulator of South Africa to approve a 36.1% electricity price hike from April next year, a 11.8% price increase in 2026, and a 9.1% increase in 2027. Here are some of the problems with the planned tariff increase.

Why such a big hike?

Eskom says the multi-year price increase is because of the need to move closer to a cost-reflective tariff that reflects the actual costs of supplying electricity.

However, its electricity tariff increases have been exorbitant for several years - an 18% increase last year and a 13% increase this year. This is a price increase far above inflation, which is currently at 4.4%.

Some companies have installed their own generation capacity, and individuals have moved to rooftop solar systems. As a result, electricity sales have fallen by about 2%, resulting in a drop in revenue.