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Off-grid households 'targeted' in proposed Eskom tariff hikes

By [email protected] (Alex Patrick)

If Eskom’s new proposed tariff hike is implemented, it could hit hardest the pockets of households using less electricity than the average — as well as those living off the grid.

On July 5, the Pretoria high court ordered the National Energy Regulator of SA (Nersa) to publish Eskom’s tariff application for an increase of 32.66% for 2023/24 by August 1.

Eskom GM of regulation, Hasha Tlhotlhalemaje, said it was difficult to give the final cost for homeowners because the tariff would only be announced by December 24.

But Eskom was using the 2020/21 financial year to base the increase on, which she said would likely be the case.

Tlhotlhalemaje said it was important to understand the context of the increased tariffs.

During the previous three financial years Nersa had incorrectly deducted R69bn from Eskom’s allowable revenue. They have been ordered to add this deduction back to Eskom over the next four years.

Despite this, if the tariff is accepted, it will see households which use other sources of electrical power, like solar, paying R720 more just to be connected to the Eskom supply. 

In simple terms, those who are connected to the grid but do not use any of Eskom’s electricity would previously have paid R218, but will now pay R938. 

Those who use 400kWh or below were paying R888, but will now pay R1,481 a month, and those who use 800kWh or below were paying R1,752 but will now pay R2,023 a month. 

According to Eskom, the average household uses 900kWh of electricity per month.

The proposed tariff only works in the user’s favour once they exceed the typical monthly usage.

  • Those using 1,200kWh would pay R2,810 pm, but will now pay R2,563 pm
  • 1,600kWh would pay R3867 pm, but will now pay R3107 pm
  • 2,000kWh would pay R4,925 pm, but will now pay R3,649 pm
  • 2,400kWh would pay R5,983 pm, but will now pay R4,192 pm

Organisation Undoing Tax Abuse (Outa) chair Wayne Duvenage said people going off the grid are now faced with a Catch-22 situation where they need to seek an alternative electricity supply, but are penalised for doing so. 

He said Outa is still trying to unpack the new tariffs but on the face of it their concern was on how the crumbling power provider was going to charge individuals.

“Our concern is that the electrical costs are rocketing way out of line because the tariff increases given by Nersa to cover [Eskom’s] costs have escalated well above the inflation rates because of the utility’s need to pay back their loan.

“It’s just been a poorly managed organisation for far too long.”

Meanwhile, Wits energy and justice expert Prof Lwazi Ngubevana said he had not seen the actual proposal for the tariff hikes but believed grid defection was socially unjust.

“It is only those with means that can afford to go off the grid, further entrenching inequality in the country, as the poor are then left further burdened with grid costs. We see this in private health, private education and so on, and I feel we should not make energy access and affordability, an exclusive right to those with means.

“Now, what the actual cost is or should be, is perhaps something that can be looked at.

“Using less than 900kWh not only affects those with solar power, but also the poor, who cannot afford to buy electricity, so if the proposal is that the tariffs cover everyone — not just those on alternative energy sources, then it would certainly be unjust for the poor.”

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