City Power says Eskom’s proposed electricity tariff unjustifiably high! Johannesburg City Power has lodged a formal objection to the National Energy Regulator of South Africa (NERSA), raising concerns over Eskom’s proposed electricity tariff hikes for the next three years.
The utility warns that the planned increases could have dire economic and social consequences for municipalities and households.
Eskom’s Proposed Hikes
Eskom is seeking regulatory approval to raise tariffs significantly, aiming to generate over R1.4 trillion in revenue between 2026 and 2028. This plan includes a 36.15% tariff increase effective from April 2025. If approved, the cumulative effect of these increases over the three-year period would amount to a staggering 66% hike in electricity costs.
These proposed increases come on the heels of a 12.75% tariff rise in 2024, which already strained households and businesses nationwide.
Economic Concerns
City Power has described Eskom’s proposed tariff increases as “unjustifiably high”, cautioning that they will exacerbate existing challenges such as poverty, unemployment, and social instability. Many communities are already grappling with rising living costs, and further increases could push them to a breaking point.
The utility’s spokesperson, Isaac Mangena, highlighted the collective opposition to the hikes:
“Our submission is in line with a collective decision taken by municipalities in Gauteng to reject the 36.15% tariff increase, which is exorbitant.”
City Power argues that the proposed increases would significantly affect both individual consumers and the broader economy, driving up operational costs for businesses and potentially leading to further job losses.
A Call for Sustainable Solutions
In its submission to NERSA, City Power proposed that future tariff hikes be capped at 11% annually. The utility believes this figure represents a fair compromise, balancing Eskom’s financial requirements with the economic realities faced by consumers and municipalities.
This proposal underscores the importance of a measured approach to addressing Eskom’s revenue needs without causing unsustainable price shocks. City Power’s submission also raises concerns about the accuracy and efficiency of Eskom’s projected operating costs, suggesting a closer examination of the utility’s financial management practices.
Municipal Collaboration
The objection from City Power is part of a broader effort by Gauteng municipalities to oppose Eskom’s proposed increases collectively. Municipalities argue that the hikes will undermine their ability to deliver services effectively, as rising electricity costs reduce the funds available for other critical infrastructure projects.
Social Impacts
City Power’s warning about the potential social consequences of the proposed tariff hikes is particularly striking. With unemployment already at high levels and many South Africans living below the poverty line, additional financial burdens could lead to heightened social unrest.
Eskom’s reliance on tariff increases to address its financial challenges has long been a point of contention. Critics argue that the utility should focus on improving operational efficiencies and reducing corruption rather than passing costs on to consumers.
Toward an Equitable Energy Landscape
City Power’s submission to NERSA reflects a growing demand for a more equitable and sustainable energy pricing structure in South Africa. The utility emphasized that it is committed to working toward a solution that balances the needs of all stakeholders.
“Our recommendations aim to create a more equitable energy landscape while safeguarding South Africans from unsustainable price shocks,” Mangena stated.
The Road Ahead
The final decision rests with NERSA, which must weigh Eskom’s revenue needs against the economic realities facing South African households and businesses. While Eskom argues that the increases are necessary to ensure financial sustainability and invest in infrastructure, municipalities like Johannesburg City Power warn of the devastating consequences if these hikes are implemented without consideration of their broader impact.
As public hearings and discussions continue, the stakes are high for all involved, with the potential outcomes affecting millions of South Africans in the years to come.
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