The National Energy Regulator (Nersa) announced today that a tariff increase of 18.65% has been granted to Eskom for the 2023/24 tariff year.
Eskom had applied for a 32% tariff increase for this year. For the 2024/25 financial year, Eskom has been granted a 12.74% increase. They had applied for 22.52%.
Although the increase is lower than requested by Eskom, Agri Western Cape has described at as intolerable.
“This is a drastic increase in tariffs for electricity supply that is already extremely unreliable. Consumers therefore pay more for less power,” said Jannie Strydom, Chief Executive Officer of Agri Western Cape (AWC).
During the public hearing, AWC emphasised that agriculture cannot afford a tariff increase above inflation.
“The energy needs of farming operations remain the same irrespective of the electricity tariff. Producers are now forced to invest in alternative sources of electricity, which requires enormous capital,” Strydom argued.
This tariff increase is applicable to Eskom’s direct customers and will come into effect on 1 April 2023, while the increase for municipal customers will only come into effect on 1 July 2023.
Food security cannot rest solely on the shoulders of producers. Food production is currently under immense pressure. Decision-makers need to recognise the seriousness of the problem – urgent intervention is needed.
Meanwhile, Cape Town Mayor Geordin Hill-Lewis has branded the price hike as unfair, unaffordable, and unjust.
He says the City is planning to lessen reliance on Eskom’s increasingly unaffordable electricity by buying power on the open market.
The second phase of Cape Town’s independent power procurement will get under way within the next month.
Besides bringing more affordable power into the Cape Town grid, the aim is to provide at least four stages of load-shedding protection progressively over the next three years under the Mayoral Priority Programme to end load-shedding over time.
Approximately 70% of the City’s income from the sale of electricity goes toward buying bulk electricity from Eskom, and the remaining 30% ensures a reliable electricity service and healthy grid infrastructure.
Hill-Lewis says given that Eskom power is the biggest cost driver, the City is aiming to reduce sole reliance on Eskom as soon as possible.
The price of electricity has risen more than 500% over the past 16 years, far exceeding inflation over that time.
The GOOD Party’s Brett Herron has added his voice to the matter saying now is the time for municipalities to reduce their operating costs, cutting excess and waste, and their reliance on profit making from electricity sales.
As Councils across the country prepare their 2023/24 budgets, which come into effect on 1 July 2023, they must assist their consumers by restructuring their budgets to avoid large and unaffordable mark-ups on the costs of electricity.
