NERSA allows yearly 8% electricity price increase for 2013-2018

Pay more for electricityThe price of electricity in South Africa will continue to increase year-on-year from 2013-2018. The National Electricity Regulator of South Africa (NERSA) announced that the price will increase 8% each year for the next five years. The increase is half the increase of 16% originally requested by the national electricity utility Eskom during the third multiyear price determination (MYPD3) period, 2013-2018.  The approved tariff increase, which was based on an allowable Eskom revenue of R906.6-billion, would result in the electricity price increasing to 89.13c/kWh by the end of the MYPD3. The average selling price of electricity in South Africa would rise to 65.51c/kWh on 1 April for Eskom customers and 1 July for municipal customers.


The average annual selling price of electricity in South Africa for last year (2012/2013) was approved at 60.66c/kWh, a 16% increase from the previous year. The graph below shows the % increase in the average annual selling price of electricity in South Africa from 2002-2017/18.


The prices for the next four years based on the 8% annual increase would be as follows:

2014/15 (70.75c/kWh)

2015/16 (76.41c/kWh)

2016/17 (82.53c/kWh)

2017/18 (89.13c/kWh)


hough the electricity increases are lower than expected, the increases are still higher than consumer inflation which is forecast to be at 5.5 percent per year over the next few years, as stated by Minister of Finance, Pravin Gordhan in his recent Budget Speech. .

Prior to load shedding experienced in 2008, NERSA set increases averaging around 8% annually. Since 2008, NERSA has approved average electricity price increases of over 20% each year. Demand for electricity in South Africa has continued to increase since then and Eskom’s selling price has risen dramatically in order to fund capital expansion to meet future demand.


The figures in this article are based on the average prices that Eskom charges for electricity. Many residents and businesses pay a higher rate for electricity as they purchase electricity from local municipalities who in turn purchase from Eskom.


Source : UrbanEarth

Wednesday, October 2nd, 2013 - News

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