The National Energy Regulator of South Africa (Nersa) has issued a statement clarifying reports that Eskom would be applying for a 36% hike in electricity tariffs in 2025, saying that no official applications have been made.
The regulator said that it is public knowledge that Eskom has submitted a draft revenue application for guidance on the regulatory process – but this is not the final document.
“It is important to clarify that NERSA has not yet received Eskom’s final application for consideration,” it said.
“Once the final application has been submitted, Nersa will consider the application, and diligently adhere to Nersa’s regulatory processes. “
The leaked Eskom documents, seen and reported on by Daily Maverick in June, showed that Eskom would be seeking massive tariff hikes over the next three financial years:
- 2025/2026: 36.15%
- 2026/2027: 11.81%
- 2027/2028: 9.1%
These tariffs would reportedly apply to Eskom direct customers, with customers powered by local municipalities facing even higher rates hikes.
Notably, these increases do not include the additional amounts that energy regulator Nersa will allow the utility to ‘claw back’ from the Regulatory Clearing Account (RCA).
Nersa announced earlier in August that Eskom would be allowed to recover over R8 billion through the RCA from the 2021/22 financial year.
This would translate to a 4% tariff hike on top of the possible 36.15% application for 2025, pushing it above 40%.
Even though Eskom has only applied for a R9 million clawback in the RCA for 2022/23, this does not include a potential R23 billion Eskom is entitled to from a previous court ruling against Nersa.
Another R23 billion could be due in 2026 from the 2023/24 RCA, meaning even higher hikes in the medium term.
The reported hikes sparked immediate backlash from electricity users and various stakeholders, including political parties like Democratic Alliance (DA), which announced plans to challenge the hikes in parliament.
They also come in the context of a growing electricity pricing crisis in the country, which the Department of Energy and Electricity has vowed to address.
This week, energy minister Kgosientsho Ramokgopa again flagged the growing struggle for households in South Africa to afford electricity, saying his department was working with the South African Local Government Association (SALGA) to find a way to address it.
Electricity pricing is also resonating on a presidential level, with the South Africa’s Energy Council expected to switch gears from its focus on the end of load shedding—which is approaching—to dealing with the escalating costs, among others.
According to Nersa, for the time being, the Eskom tariff hikes circulating are drafts and by no means official.
It said that once Eskom has made its final application, the details will be made public.
“These processes include publishing the application on the Nersa website, conducting a thorough public participation process that involves inviting stakeholder and public comments, and conducting public hearings.”
In March, Nersa made the decision to fully disclose all proposed tariff hikes and decisions in “high profile” matters to the public.
In the past, Nersa would withhold certain information from the public until the final decision was published and regulated entities were informed of the decision.
However, now decisions by its subcommittees, particularly the Electricity Subcommittee and the Petroleum Pipelines Subcommittee, will no longer withhold the exact number or decision, for example, the total percentage of allowed tariff/revenue being recommended to the Energy Regulator for approval.
Read: South Africa’s next Eskom-sized crisis is already here
