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Electricity tariffs to rise 15%

Set to boost Eskom’s revenue by a further R10 billion.
South Africans are set to pay more for power. Image: Shutterstock

South Africans are in for a hefty rise in the price of electricity, as the National Energy Regulator of South Africa (Nersa) has agreed to Eskom increasing its tariff by over 15% for the 2021/22 financial year.

The agreement between Nersa and Eskom came after the power utility won a case in the Pretoria High Court in October 2020, which allowed it to push for a higher tariff increase than what Nersa was willing to allow.

Under the agreement, an amount of 5.44c/kWh will be added to the average standard tariff, bringing the rate Eskom customers will be forced to pay in the 2021/22 tariff year as of April 1 to 134.30c/kWh – a 15.63% increase.

Read:
Crucial Nersa tariff decisions up for discussion
Eskom fights tooth and nail for massive price increases

The increase will see the debt-laden Eskom raise a further R10 billion in “allowable revenue”, according to a court order issued by Judge Joseph Raulinga.

Though the tariff increase is a further blow to cash-strapped South Africans, it’s a boost for the beleaguered power company, which has over R400 billion in debt and is owed R31.5 billion in overdue debt by several municipalities.

Read: Eskom gets tough with errant municipalities, grabs cash and land

Eskom welcomed the move, saying the implementation of the order would move it “towards addressing some of the revenue shortfalls” and “enable it to recover prudently incurred costs for the production of electricity,” which in turn would help to improve its financial sustainability.

It said also contributes to the “user pay” principle and was likely to lessen the financial burden of supporting Eskom on the government, releasing the government to focus on other priorities.

Organised business said the increase will be a double blow for consumers. They will see not only pay directly for the increase but also have to face up to businesses passing on tariff increases to them through higher prices, said Business Unity SA (Busa) energy and environment policy manager, Jarredine Morris.

Aside from the steepness of the tariff rises, Morris said there is also a problem in the methodology in how the tariff increases were calculated and implemented. As things now stood, this process made tariff increases difficult to predict, which in turn made it hard for businesses to plan ahead.

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15% increase to grow the revenue by R10 Billion?

Government will benefit more by paying the R10 Billion and the economy will return more than R10 Billion!

Remember they =ANC, is only fleecing those who pay for electricity. Majority ANC municipalities and comrades do not pay in any case.

Ah but I reckon a goodly proportion of the R10bn will be syphoned into ANC fatcat cadre pockets. That is the attraction. They do not care about the economy.

Meanwhile Johannesburg has never been so blitzed by daily and foul smelling air pollution from the Eskom/Sasol alliance. Their pollution is the worst on the planet and despite repeated court cases to have it addressed nothing but nothing has been or ever will be done about any of it. It just gets worse and worse. This present bombardment of lung-damaging air-borne chemicals comes in the middle of stage 3 lock down for the rampant Covid pandemic. This is how the worlds most infamous thief-protecting regime operates to deliberately starve and kill as many of its people as it can by wilful, malicious and immoral failures of governance that will simply never see any effort from the ruling scum to do any right thing.

Some more solar panels for me !!

You are way Smarter Than a Fifth Grader, count me in. The last time I checked the sun still rose on time and set on time, and gave no less than seven good hours of free sunlight, up to more. Absolutely free, with no government or political interference. Think about it, in the continent with the longest meaningful sunlight hours where solar can be harvested for free … day in and day out people still use candles, in ‘the most advanced and largest economy in Africa’. Its are real crying shame. Not for me, let’s welcome more people to solar and let Nersa ‘mors net so’, bring on the sunlight, ‘want dit vind jy orals soos kosmos blomme, and dit kosmos werklik niks nie!’ (Disclaimer: motho o ngwetseng fa ke mmui wa diteme (maleme)a batho, eseng lekgoa, which when translated into the Queens language loosely means, the person who wrote here is a speaker of native languages not to be misconstrued for a European (meaning an Afrikaans speaking European) to avoid confusion).

The PAYG schemes for contracted renewable installations are based on financial models that assume unaffordable inflation-driving increases as an inevitabe consequence of the crippling blatant theft. As they bang their transformation drums that were once used for the apartheid distraction for their co-ordinated theft of the public purse causing unrepayable debt. Obviously, the people that make up this ex-leader of African nations can only spiral into ultra 3rd world poverty. The ruling gangsters and their offsprings will just keep distracting us all and cleverly thieving until there is nothing left to thieve, not even future taxes. As it was predicted by most all those that have emigrated with far better exchange rates. Plenty scope left there to force out the impoverished remainder. The all-black utopia includes no power, no heat, no fuel, absolutely nothing.

R400 billion in debt! I know us citizens are fuming but those creditors / bond holders must be quaking in their pointy shoes. ESKOM is dead. That money will NEVER be re-payed. Irony of ironies, ESKOM’s own lights are almost out. Leave the grid and let them rot

Wait until the Zero bonds start becoming payable in 2027 and 2032 !

15% increase, wow, and solar becomes cheaper and cheaper.
This 15% will push how many PAYING customers to solar?
Then eskom needs to do their calculations all over again and coming up with a hefty increase again and so on and on until all the currently paying customers are off the grid.

You can add VAT to that 15% , plus what are the municipalities going to charge their customers for electricity. Administered inflation far outstrips that qouted by the government’s official figures.

15.63% plus 15% VAT is 17.97 percent more !!!

That should make an impact on the R400bn debt.

How about that, Our Taxes bail them out, then they nail us with a 15% increase before Municipal increases Absolute Disgrace and means absolutely Nothing if the masses don’t pay. Cut the Non payer off for Good till debt is paid. Connect me directly so we at least cut out One thieving cost in the supply chain the Municipalities.

Collect your debt and stop screwing your paying customers.

And 15% more consumers will turn to solar energy thus speeding up the downward spiral of ESKOM into obsolescence.

So will make solar power & off grid even more attractive!

5 times inflation?
People will do what the ANC does-and steal electricity!
Someone has to pay for this …

But we are paying those tariff’s already & higher, effective 1 July 2020 than those mentioned in the article!!!!!!!!

Would Moneyweb like to see actual proof of the tariff’s being charged?

If so please advice the which email address & the actual monthly account will be scanned & submitted as proof.

In principle, the Reserve Bank is independent and in control of monetary policy. The reality is quite different though. The inefficiencies and corruption that accompanies cadre deployment and Central Planning put Luthuli House squarely in control of monetary policy.

A competent Reserve Bank raises interest rates or increases the reserve ratio in the banking system if it wants to cool down the strong economic growth. If they overshoot to drain too much liquidity from the system the economy will enter a contraction, recession and depression.

The Governor is accommodative, but Luthuli House, on the other hand, is aggressively draining liquidity from the economy by raising the price of electricity and administered prices. They destroy this money by throwing it into a bottomless pit of inefficiency and corruption. Through this action of money destruction, Luthuli House forces the economy into the worst depression in more than a hundred years. Eskom is a mechanism that uses its monopoly to mop up spending power from citizens by charging them exorbitant fees for an inferior product.

In effect, Eskom is a parasite that sucks the profit margins out of businesses, the purchasing power from salaries and the job opportunities from the economy to dump it all in the lap of BEE tenderpreneurs and connected cadres. Our loss is the opulence in Luthuli House.

This game plays out like the old company computer days.

So in 70’s and into 80’s company had an awful mainframe or mini computer setup and they split the total cost (which in IBM days was hefty) across all departments and users. Mary in warehousing found this great thing called client-server computer packages on nice color PC nogal with a mouse. Is 30% cheaper.

Next year the rest of company still pays IBM that big number but now it costs all departments 20% more because Mary buggered off. So Johnny in HR discovers a nice payroll package that runs on PC and the PC now has Lotus Notes for early email. HR buggers off. The snowball runs on and on.

The same is happening now with electricity. Those that can, make another plan. It is very simple math to show that, even with a big capex spend, that solar plus batteries plus gennie will handsomely beat grid power on an IRR calculation that ignores being largely freed from loadshedding. Nearly impossible for a business that runs hard and almost continuous, but a no-brainer for a mostly daylight business.

Eskom revenue will flatline or decrease while its costs increase. It does not bode well for our future rates & taxes as electricity councils rely on that 60% markup. It does also not bode well for our income taxes or VAT rates.

Biggest risk to Eskom would be a breakthrough in solar/renewable energy technology making it affordable to the masses. I belief this day is not too far away.

i simply can’t wait for alternative power to become the main power producers – the way the government / eskom works is at your service but keep in mind our fatal incompetence cost is for our clients by increased tariffs to accept every year with a smile on their faces – eskom is in its fatigue / exhausted state due to 25 years of incompetence leadership – the titanic is sinking.

I agree with you AP (and also Johannes). A time will come where PV-solar will be cheaper in the long run. The more Eskom increases tariffs, the more worthwhile alternatives become.

But…

Maybe one day we’ll see a municipal entry on our monthly statements: “panel tax”.

I say, “What?!”

Council responds: “…we have counted four panels on your roof, from recent satellite imagery”

In Cape Town for metered power I pay R2.11506/kw, vat incl. I wonder how the raise will affect me? Gotta by a tub of Vasaline while I can still afford it.

You will own nothing and you will be happy. World Economic Forum.

https://youtu.be/60MzTlrOCXQ

This is all part of the Expropriation Without Compensation scheme, making every day life more and more unaffordable to the point where the government owns everything creating the illusion that the collective own it and you are part of the collective.

How does an increase of 5.44c/kwh become an increase of 15.63%?

I think they confuse total and energy charges. At factory my cost is just shy R3/kWh if combine all the charges. I suspect very strongly that my increase will be closer to 50c than 5c :/

At 350c I may as well run diesel daytime and run grid at night when loads are low (ignoring solar)

Briefest article by Larry Claasen

I guess the story is dead, buried and boring

Utterly disgusting that we have to sponsor a regime department that is in a death spiral!

A rise in elec tariffs is not going to help Eskom much IF they continue with sporadic Load shedding in future!

So please Eskom, END load shedding for good…and allow me to USE MORE OF YOUR PRODUCT , so that I can add to your bottom line.

can guarantee you eskom does not understand the concept you have just explained / asked for them right now and most probably will never be able to understand it

Another one of RamaPromises that was abandoned. Recall that when RamaPromises took over in 2018, he stated that administered prices, particularly from Eskom, were too high and that some committee (RamaPromises standard response: form a committee, commission of enquiry, war room, etc.) would look into the matter. Then as per ANC double-speak, the opposite happened.

another one of standard response entity’s names: coronavirus command council

User pays principle? But its an established FACT that a huge number of electricity users in this country DON’T pay for what they use? How is revenue collection being addressed?

ESKOM should not bargain too much on the expected increase in revenue due to 15% price hike as people are turning to gas and solar solutions to pay less on electricity. I installed a gas stove a month ago and today a solar system was fitted to my geyser that will bring down my electricity bill by approximately 35%.

End of comments.

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