Eskom defends 36% tariff hike as public hearings begin

The request to national energy regulator Nersa comes as the power utility continues to grapple with significant financial challenges.  

Nerda has already approved a 4% tariff hike to help Eskom recover R8 billion in losses from the 2021/22 financial year, bringing the total proposed increase to over 40%.  

Eskom’s multi-year plan also includes proposed tariff hikes of nearly 12% in 2027 and 9% in 2028.  

Public hearings on the latest tariff application began on Monday in Cape Town and will continue across provinces until December 4.  

Speaking at the hearings, Cassim highlighted Eskom's financial struggles, particularly the R90 billion owed by municipalities.  

“Any entity that has R90 billion owed to them is not sustainable. We need to reduce the debt on the balance sheet. R400 billion cannot be serviced from cash operations. It needs to be brought down to R250 billion to be more sustainable,” said Cassim.  

He added that if Eskom’s financial challenges aren’t addressed, the utility may have to turn to the government for additional support—a move he stressed they wish to avoid.  

“We’re asking the regulator for mechanisms to address affordability while balancing the utility’s needs and protecting the poor. We don’t want to be a burden on the fiscus,” Cassim said.  

He also expressed concern about the growing municipal debt, which increases by R1 billion annually, with R12 billion owed by metros alone.  

“Our concern is that this trend of non-payment, even by metros, is unsustainable for a utility like Eskom,” he said.  

Cassim hopes for a fair and balanced decision when the hearings have concluded.

Meanwhile, a large group of DA members held a picket outside the hearing, calling for the proposed hike to be scrapped.  

Western Cape Premier Alan Winde, who joined the protest, said South Africans cannot afford Eskom's 40% price hike proposal.  

“Year after year, Eskom asks Nersa for excessive increases. Two years ago, we saw 18%, 13% last year, and now they’re asking for 40%. That is just unacceptable.

“South Africans can’t afford it. We have slow economic growth, high unemployment, and an affordability crisis.

“People can't put food on the table, and now we want to impose an outrageous increase. We must reject it,” Winde said.  

The DA also held a picket outside Nersa’s office last week and submitted a petition with 200,000 signatures from South Africans opposing Eskom’s tariff application.  

ALSO READ