South Africans struggle with rising electricity prices

South Africa had the 15th-most expensive electricity prices in the world in 2023.

Continued increases in electricity prices have dealt a significant blow to ordinary South Africans, who are finding it harder to afford a basic living.

And yet the National Energy Regulator of South Africa (Nersa) approved new electricity tariff increases in December last year.

The Centre for Renewable Energy Solutions reported that South Africans spent 78% of 2023 in darkness, with more than 6 800 hours of load shedding. This equated to double the load shedding in 2022.

In the past 10 years, Eskom’s electricity generation has decreased from 21.7K gigawatt hours to 18.7K gigawatt hours.

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The power utility has staved off load shedding for just over three months in 2024. The Eskom board chair said the improved performance was due to changes in its maintenance strategy bearing fruit.

Rooftop solar installations have alleviated load shedding by contributing just over five gigawatts of electricity capacity.

But Eskom CEO Dan Marokane has warned that load shedding remains a risk as the troubled state-owned entity navigates an endless cycle of rising debt and electricity price increases.

From 1 July 2024, municipal electricity tariffs increased by 12.72%.

From 1 April, 2024, Eskom direct customers paid 12.74% more for electricity.

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Additionally, the affordability subsidy charge was increased by 25.24%. This brings the effective increase in electricity for Eskom direct customers to 13.29%. City Power has added a recurring R200 fee for middleand high-income prepaid electricity customers in Joburg.

These increases mean that prepaid electricity customers with lower energy needs will pay 12.74% more for electricity. Medium to high prepaid electricity consumers will pay 70% more if they exceed 600kWh.

Consequently, the price of electricity has increased by 33.8% in just two years. Shockingly, BusinessTech reports that the price of electricity has increased by 450% since the onset of load shedding in 2008. Compared to the 98% inflation rate over this period, the price of electricity exceeds the consumer price index by 352%.

AfriForum recently took Nersa to the High Court in Pretoria to interdict the 12.72% price hike for municipal consumers as they alleged Nersa failed to comply with the law.

On 28 June, the high court declared that Nersa’s decision to consider electricity tariff increases was unlawful and invalid as the municipalities did not submit required cost studies.

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Nersa had 178 applications for increased tariffs by municipal electricity distributors. However, only 66 applicants submitted their cost studies as required by the Electricity Regulation Act 4 of 2006 and a high court order from October 2022.

The high court ordered municipalities whose cost studies were absent to continue charging existing rates approved for the 2023-2024 fiscal year.

A confidential document drafted in May this year shows Eskom is considering increasing municipal electricity prices by 43.55% in 2026; 3.36% in 2027 and 11.07% in 2028.

Additionally, Eskom direct customers will be hit with a 36.15% increase in 2026; 11.81% in 2027 and 9.10% in 2028.

Eskom justified the increases stating that the Electricity Regulation Amendment Bill poses a risk to its revenue. But the significant reform it promises may be years away.

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• Murphy is a contributor to DearSA, a not-for-profit platform that enables the public to comment on government policies, amendments and proposals

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