Eskom's 19% price increase has been approved, which is terrible news for urban and industrial consumers

The South African National Energy Regulator (Nersa) has given Eskom final authority to execute an 18.65% average energy pricing hike.

Nersa stated that its decision on Eskom’s Retail Pricing and Structural Adjustment application was taken at a meeting on March 10, 2023.

Eskom has submitted a new proposal on March 2, 2023, with a lower increase for Homelight 20 Amp consumers.

Those who use Eskom Homelight 20A will only experience a 10% increase.

According to the environmental activist group Project 90 by 2030, Eskom typically provides Homelight 20A to informal settlements and Homelight 60A to private residences.

Homelight rates are partially subsidised by Eskom and do not include any capacity costs.

Capacity costs are set monthly payments paid by other Eskom customers for grid connections.

While consumers of Homelight 20A would experience a significantly lesser price rise, Nersa authorised a 29.53% hike for essential industrial and urban clients.

“Key industrial and urban customers will realise an 18.65% increase plus an additional 7.37c/kWh to cater for the subsidy, which increases from 5.69c/kWh resulting in a 29.53% increase,” it stated.

Nersa authorised an 18.49% rise in municipal tariffs.

It indicated that municipalities will have a lesser rise than Eskom due to a fiscal year mismatch.

Eskom’s price increases take effect when its new fiscal year begins in April, while municipalities may only raise their tariffs in July.

“In the first three months (April to June) of Eskom’s financial year, they will not experience an increase, as their financial year commences on 1 July every year,” Nersa explained.

“The municipalities cannot increase their tariffs in the middle of their financial year, as it would not correspond with the revenue to be achieved from licensed municipal distributors.”

Nersa stated that its authorised pricing do not include the government’s existing 15% VAT.

The table below summarises Nersa’s authorised retail power rate modifications for fiscal year 2023/24.