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Eskom has announced that the price of electricity in South Africa will increase from April 1, 2021.
This is the result of three decisions made by the South African National Energy Regulator (Nersa), which, according to Eskom, will bring electricity prices more in line with the cost of energy production.
“The National Energy Regulator of South Africa has made three decisions that are planned to increase the average price of electricity from April 1, 2021,” said Eskom Chief Regulatory Officer Hasha Tlhotlhalemaje.
“All these decisions refer to efficient costs, as determined by NERSA, incurred already in 2014.”
The regulator announced that it will allow Eskom to recoup an additional 6 billion rand after reviewing previous decisions on power rates.
This amount will be recovered through price increases made in April of this year.
“NERSA has yet to determine the scope of the increase and this is expected to happen in late February 2021,” said Tlhotlhalemaje.
If consumers don’t pay, taxpayers
Tlhotlhalemaje said that efficient costs for electricity production remain a prominent issue for Eskom, adding that the power company will need to recover these costs from users or taxpayers through the government.
“If consumers don’t pay, then the taxpayer would have to pay,” he said.
“This negatively impacts other government priorities that the government is busy with at the moment.”
He also noted that destitute South Africans would be protected from these increases due to existing subsidies and free basic services.
“It should be noted that vulnerable sectors, such as poor residential customers, are protected by private subsidies, as well as free basic electricity,” said Tlhotlhalemaje.
“Eskom prefers that the user pay for the electricity instead of being subsidized by the taxpayer.”
“The price of electricity is still migrating towards the efficient level to produce electricity,” he said.
The decisions made by Nersa are as follows:
- Implementation of the Fiscal Year 2019 Regulatory Compensation Account (RCA) Decision
- The decision on Eskom’s FY2019 supplemental application was made in accordance with the judgment and order of the High Court.
- The revised decision made in Eskom’s 2015-2017 FYR RCA decision in accordance with Superior Court judgment and order.
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