By the end of 2018, should South Africa’s national energy regulator, Nersa, rule in favour of state-owned power utility Eskom, electricity tariffs will increase by 30%.

Energy expert Ted Blom revealed that municipalities also want to increase the price of power by 5% “with some adding more than the recommended 6.84% suggested by Nersa”.

Eskom submitted three Regulatory Clearing Account (RCA) applications to Nersa to try and recover R66 billion for over-expenditure and low sales in 2014/15‚ 2015/16 and 2016/17.

Subsequently, the regulator has invited the public to comment on Eskom’s request to increase tariffs. The closing date for comments is Friday, midnight 23 March 2018.

The Energy Expert Coalition has provided an online space for the public and interested parties to post comment on the tariff hike. Click here to add your comment

“The public will merely continue funding the Eskom gravy train and the effects will compound over time. Eventually‚ exchange rates will be affected as excessive electricity costs make South Africa increasingly uncompetitive to the point where exports will cease,” said Blom.

Eskom bottom line profit

Documents, submitted by the power utility to Nersa, have shown a request for recovery of R66 billion, due to Eskom’s over-estimation of electricity sales and overspend on coal, gas and imports from 2014 to 2016.

Blom noted that despite massive corruption, inefficiencies and irregular expenditure, the company still shows a bottom line profit of over R20 billion before the RCA claims from 2013 to 2016.

  • 2014 shows a net profit of R5,183 billion (+R10 billion RCA)
  • 2015 shows R7,089 billion (+R19.18 billion RCA)
  • 2016 shows R3.6 billion (+R23.6 billion RCA
  • 2017 shows R4,617 billion (+R23.8 billion RCA)

“Effectively, Eskom will never run at a loss as any shortfall is recovered through a flawed annual RCA application. In other words, Eskom recovers any shortfall in projections by increasing consumer’s tariffs the following year. This increase is over and above annual tariff increases,” he added.