Eskom granted permission to hike electricity prices in April.

Eskom has been allowed to increase their electricity prices by a ‘substantial amount’, in order to recover R13 billion in efficient costs. The news comes as a body-blow for millions of South Africans who have been hit hard by the twin impacts of COVID-19 and lockdown.

Starting from Thursday, the 1st of April 2021, the process to reclaim the mammoth funds will begin. In the upcoming financial year, the firm is hoping to raise R6.6 billion by jacking up its costs. The news comes just days after South Africa was plunged into a prolonged period of load shedding. Earlier this week, five provinces were subjected to ‘load reductions’, as power was pulled from regional grids.

The Municipality of Stellenbosch, meanwhile, is looking to become the first town in South Africa to go ‘completely independent’ from Eskom. The local council has announced plans to produce and generate its own electricity supply. Something that sounds rather tempting after reading the SOE’s latest statement:

“Nersa has decided that an amount of R13.2 billion in efficient costs incurred by Eskom will be incurred in the Financial Year of 2022 and the Financial Year of 2023, spread over into two Payments of R6.6 billion. This will allow a smoothing of the tariff increase and minimise the burden on the government.”

“It is best to enforce the ‘user pay’ principle, where the consumer of electricity is asked to pay. The efficient costs do not go away. Eskom is required to depend on more and more debt, as well as further equity support from the government to continue to provide energy services. Thus, the consumer is continued to be provided a subsidy funded by the taxpayer.”

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