South African businesses and consumers will have to brace for the latest electricity price hike next month following a decision by the National Electricity Regulator of South Africa (Nersa) to allow Eskom a 9.61% average tariff increase for 2022/23.
Nersa confirmed on Monday that it had made a determination on Eskom’s Retail Tariff and Structural Adjustment (ERTSA) application on March 9 and approved an average tariff increase of 9.61% for Eskom’s standard tariff customers and an increase of 8.61% for municipalities.
The increase for Eskom’s standard tariff customers will be effective from April 1 and from July 1 for municipalities.
“Municipalities will realise a lower increase of 8.61% due to the fact that in the first three months (April to June) of Eskom’s financial year, they will not experience an increase, as their financial year commences on July 1 of every year,” Nersa said.
“The municipalities cannot increase their tariffs in the middle of their financial year, as it would not correspond with the revenue to be achieved from licensed municipal distributors. In this regard, Eskom will over-recover revenues in the first three months (April to June) of its financial year, hence municipalities will only experience an increase of 8.61% as opposed to the 9.61% that will be seen by the rest of Eskom’s customers,” Nersa added.
The July 1 implementation date for municipalities is in accordance with the requirements of the Municipal Finance Management Act, 2003.
Nersa guides the process of allocating revenues to different customer categories, including the allocation of revenues and volumes between Eskom and municipalities.
Eskom submitted its ERTSA application for the 2022/23 financial year, together with the schedule of standard tariffs, for approval on February 28.
Nersa said it would provide its reasons for the decision in due course.
