Proposed Eskom tariff increase could sink municipalities – report

Municipalities across the country are bracing for the possibility of a massive hike in electricity prices.

Many metropolitan municipalities are already in arrears with Eskom – and the South African Local Government Association (Salga) fears the 36% increase will see them fall deeper into debt.

Although municipalities will pass the increases onto their residents, consumers are themselves struggling to stay afloat.

R80 billion in Eskom debt

Eskom has asked the National Energy Regulator of South Africa for a 36% increase from April 2025, as well as 11% and 9% increases in 2026 and 2027.

“Eskom has made its revenue application based on the costs it will incur to efficiently provide electricity to the customer,” the entity stated in September.

Salga said that electricity costs had increased 300% in the last 10 years, with Buffalo City’s municipality experiencing a 653% Eskom increase between 2007 and 2022.

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As for September, municipalities across the country owed Eskom just more than R80 billion, with the City of Johannesburg (CoJ) owing R3.4 billion.

“The CoJ will not be able to collect the debt. We feel we need a national dialogue about this,” City Power spokesperson Isaac Mangena told the Sunday Times.

Petition against electricity increase

The Democratic Alliance (DA) voiced its opposition to the proposed electricity hike by starting a petition, which had gathered 120 000 signatures by the end of October.

 “Currently, approximately 45% of South African households face energy poverty,” stated DA spokesperson on energy and electricity Kevin Mileham.

“Research confirms that affordability is the leading cause of this crisis, with Eskom’s tariffs having increased by about 600% in real terms since 2007,” he added.

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The DA said Eskom’s cost-recovery models should be completely and intelligently overhauled.

To add to Eskom’s troubles, Nersa approved four electricity trading licences, a move that Eskom plans to challenge in court.

Nersa are still deliberating on Eskom’s request and have said they will announce their decision after all required procedures, including assessment for regulatory compliance, have been followed.

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