Joburg metro says 18% Eskom tariff hike more feasible in present economy

The City of Johannesburg is asking the National Energy Regulator (Nersa) to limit the suggested increase to electricity tariffs to 18.4% at the most.

“Eskom should rather be encouraged to introspect and seek alternative mechanisms to improve its efficiencies and reduce costs,” said infrastructure services MMC Michael Sun.

The proposed tariff hike of 38.1% is far higher than the current inflation rate and risks stifling the ailing economy that has just begun on a recovery path, he said.

“In the middle of load-shedding dragging the economy down, this is not only unrealistic but ludicrous.

“While as a city we have full appreciation that Eskom must be financially viable, this must not be achieved at the detriment of the residents of Johannesburg.”

In a presentation to Nersa, the city said it believes Eskom has room to review and revise its proposed revenue down by R55bn, which would reduce the increase for the 2023/24 financial year to 18.4%.

Sun said a review of projected revenue needs to be conducted around:

• Eskom's independent power producer (IPP) programme;
• electricity imports — specifically from the Cahorra Bassa hydroelectric plant;
• carbon tax; as well as
• battery power storage.

He told the Nersa panel that load-shedding came at the cost of “an astronomical amount of economic activities and productive hours, resulting in a magnitude of financial losses to the city, which will take it many years to recover from”.

“This unrealistic tariff hike proposed by Eskom would put a halt to business and economic recovery and would negatively impact on job creation and the city’s revenue base.”

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