Electricity prices could increase by 14.6 percent

By Staff Writer

South Africans’ hopes for an energy price hike respite were dashed last week when a report leaked to the press revealed that South African power utility Eskom, could hike electricity prices by 14.6 percent if its application is approved. 


Consumers could also see an even greater electricity price hike of 19 percent if the government introduces a carbon tax or builds new power plants beyond those that are already under construction.


Mike Schüssler, economist and founder of Economists.co.za said: “I cannot predict whether they will go ahead as that will be for NERSA to decide. The average person in the municipality is already paying over R1,000 a month if you take into consideration all the charges. However, Eskom is not as expensive. Every 15 percent increase is going to add around R180,000 making it R1,200 that the average household will pay for its lights per month.”


The Business Day said Eskom declined on Sunday to confirm a report that it proposed to raise energy prices by 14.6 percent over five years. The paper said CEO Brian Dame is quoted as saying that Eskom needs just over R1 trillion over a five year period.


Businesses, particularly those in the mining sector, have also suffered under the severe strain of energy hikes with some having to close their doors. Back in 2010, Eskom was granted an annual average increase of 25 percent. However, the tariff for 2012 was reduced to 16 percent after the government stepped in.


For electricity saving tips and advice on how to cut back on expenses and create a savings plan go to 8 Ways to save more money.

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