Eskom will avoid “price shock” with tariff hikes – De Ruyter
Eskom on Tuesday announced it will increase electricity tariffs by more than 15% on 1 April 2021.
The increase follows a settlement with the National Energy Regulator of South Africa (Nersa) after Eskom requested the High Court to order the execution of a previous decision that allowed the utility to recover incorrectly deducted Government equity support for the financial year 2021/2022.
The latest court order stated that an amount of 5.44c/kWh would be added to the average standard tariff for Eskom customers, making the aggregate standard tariff for Eskom customers 134.30c/kWh.
Nersa had mitigated in order to avoid Eskom being allowed an additional R23 billion in revenue as originally ordered, which could have lead to an increase of 21%.
Nevertheless, the reduced price hike is still more than four times the average rate of inflation for 2020.
This comes after Eskom CEO André de Ruyter earlier this week said the utility was working with Nersa to ensure its planned tariff increases don’t come as a shock to customers.
During a recent episode of FMF’s The Free Marketeers web series, De Ruyter elaborated more on Eskom’s plans to reduce load-shedding, increase its operational reliability, and improve finances.
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