JOHANNESBURG – National Energy Regulator of South Africa (Nersa) on Thursday announced its decision on Eskom’s tariff hike application.
Eskom had applied for a tariff hike of 19.9% which translates to an allowable revenue of R219.514 billion but Nersa has instead only approved a total revenue of R190.348 billion which results in a 5.23% increase.
The price hike, which is slated to last for one year only, will apply to Eskom’s direct customers from April 1, with the municipal increase on July 1 next year.
Eskom says its mandate is to provide safe, efficient and cost-effective electricity supply and it needs more funds to do so, as industries and residences that rely on electricity are flooding the market on a daily basis.
Officials also say the hike Eskom requested would help turn its financial fortunes around and ensure efficient of supply electricity in all the nine provinces of the country.
Many businesses in South Africa have been forced to use alternative power sources following escalated power outages around the country, and Eskom says it will do everything in its power to overcome any power problems.
Economists have warned that the increase shouldn’t be more than the inflation rate as major price hikes could lead to sales dropping even further.