Approving Eskom's tariff hike application as is would've had a 'devastating impact on the economy' - NERSA

JOHANNESBURG - The National Energy Regulator of South Africa (NERSA) said that the proposed tariff hikes by Eskom would have had a "devastating impact on the economy" if they were approved as is.

NERSA held a virtual media briefing on Thursday afternoon to announce its decision on Eskom's application to increase electricity prices for the next three financial years.

It approved tariff hikes for the next three years, but the increases were lower than Eskom had requested.

The cumulative increase in electricity prices which Eskom was seeking would have worked out to 57% over the three years.

The approved increase by NERSA is just over 24% for the same period.

Chairperson of NERSA's electricity subcommittee, Nomfundo Maseti, said that the regulator had to consider the interests of businesses and residents when making its decision.

"You would have an understanding, the impact such an impact of 57% would have on the economy but also on consumers that are vulnerable, some of which are unemployed and are struggling to even buy basic necessities and survive."

NERSA's approved 12.7% increase will kick in on 1 April this year.

'WE DO NOT NEED ANY INCREASES'

Meanwhile, founder of Electricity Tariffs Must Fall, Natasha Gertse, has praised NERSA for not giving Eskom the electricity price hikes it was looking for.

The power utility had asked NERSA for a 36% increase for this year, 11.8% and 9.1% for the two years after.

Gertse said that while they commend NERSA for snubbing Eskom's application, the approved increases were still too much for consumers.
 
"We do not need any increases, we actually need a relief where electricity is concerned. So no, I am not happy with any increase at all."