Eskom tariff restructuring faces affordability backlash at NERSA hearing

At a recent virtual hearing organized by South Africa's National Energy Regulator (NERSA), Eskom's proposed electricity tariff restructuring faced significant pushback from civil society groups, political leaders, and local authorities. The restructuring threatens to disproportionately burden struggling households, as costs are already rising alongside living expenses.

Sabelo Chalufu, founder of the Better Governance Initiative, urged NERSA to reject Eskom's application, pointing out that 18,206 people had signed a petition opposing the increase. A BGI survey found that electricity costs constitute about 45% of income for families earning less than R5,000 per month. This suggests that monthly electricity bills will become an even greater strain on already vulnerable families, pensioners, and businesses.

The City of Cape Town expressed similar concerns, warning that further electricity cost pressure could strain efforts to support the city's low-income residents and stimulate economic growth. Chelsea Van Schalkwyk, the city's senior professional officer for pricing and regulation, emphasized that households are being forced to choose between electricity and basic necessities like food and healthcare. She emphasized that affordability must be prioritized in any tariff adjustments.

Environmental justice activist Desmond D’Sa highlighted the disproportionate impact on poor communities, questioning whether the realities of struggling households were being adequately considered. He raised concerns about disconnections, prepaid meter costs, and safety issues associated with unreliable electricity, such as inadequate street lighting affecting women's safety at night.

ActionSA MP Funzi Ngobeni argued that Eskom's tariff structure disproportionately burdens those who use less electricity, questioning the fairness of increasing costs by a larger percentage for lower consumers. AfriForum's Morne Mostert warned that higher fixed charges could disproportionately affect low-income households and potentially push them towards alternative energy sources.

Responding to the concerns, NERSA's Muzi Mkhize cautioned that decisions exceeding existing policies and laws could lead to legal challenges. Eskom representative Kgabo Rathogo defended the proposed changes, explaining that they form part of a phased introduction of fixed service charges for Home Power and Home Flex tariffs, with corresponding reductions in per-unit energy rates.

If approved, the adjustments would take effect from April 1, 2027, for direct Eskom customers, while municipal customers would see changes from July 1, 2027.