
𝗧𝗵𝗲 𝗦𝗼𝘂𝘁𝗵 𝗔𝗳𝗿𝗶𝗰𝗮𝗻 𝗙𝗲𝗱𝗲𝗿𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝗧𝗿𝗮𝗱𝗲 𝗨𝗻𝗶𝗼𝗻𝘀 (𝗦𝗔𝗙𝗧𝗨) 𝗼𝗽𝗽𝗼𝘀𝗲𝘀 𝘁𝗵𝗲 𝗽𝗿𝗼𝗽𝗼𝘀𝗲𝗱 𝘁𝗮𝗿𝗶𝗳𝗳 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝗼𝗳 𝟯𝟲,𝟭𝟱% 𝗯𝘆 𝗘𝘀𝗸𝗼𝗺 𝗳𝗼𝗿 𝟮𝟬𝟮𝟱. 𝗧𝗵𝗼𝘀𝗲 𝗵𝗼𝘂𝘀𝗲𝗵𝗼𝗹𝗱𝘀 𝗮𝗻𝗱 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝘁𝗵𝗮𝘁 𝗿𝗲𝗹𝘆 𝗼𝗻 𝗺𝘂𝗻𝗶𝗰𝗶𝗽𝗮𝗹 𝘀𝘂𝗽𝗽𝗹𝘆 𝗼𝗳 𝗲𝗹𝗲𝗰𝘁𝗿𝗶𝗰𝗶𝘁𝘆 𝘄𝗶𝗹𝗹 𝘀𝗲𝗲 𝗮 𝘁𝗮𝗿𝗶𝗳𝗳 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝗼𝗳 𝟰𝟰%. The Daily Maverick has reported that it saw a confidential draft document to be submitted to the National Energy Regulator of South Africa (NERSA) that contains this outrageous application.
The first increase would take effect on the 1st of April 2025 if NERSA approves. Moreover, Eskom plans to have an additional increase of 43.55% in 2026, 3.36% in 2027, and 11.07% in 2028, with the first increase for these subsequent years set for the 1st of July 2025. A household with an average consumption of 900kWh could see themselves paying an addition of R1,600 per month.
Eskom’s proposal comes on the heels of a 12.74% increase in electricity tariffs which came into effect in April 2024, an 18.65% increase in April 2023, 9,61% in 2022 and 15% in April 2021. This series of increases has placed a significant financial burden on South African consumers particularly working-class households who are already struggling with the economic burdens of unemployment and the rising cost of consumer goods.
The proposed tariff increases by Eskom must be viewed in the context of long-term trends in electricity prices. Between 2007 and 2024, electricity prices in South Africa increased by more than 539% nominally. The current proposal, if implemented, will only continue this trend. Higher electricity costs will only make it harder for people to afford a living especially because it is a basic good required to heat homes, for cooking and heating water.
The history of mismanagement, corruption and looting has sabotaged Eskom’s financial health, putting it in a condition where it perpetually seeks investments to stay afloat.
Fiscal austerity has however disadvantaged Eskom with the government refusing to invest heavily in Eskom. It has agreed to a debt relief premised on Eskom being prohibited from investing in the new generation. The defunding of Eskom corresponds with the corporatisation model which has made Eskom rely on its balance sheet to survive. This has effectively pushed it into a situation where it has to raise money through sales and profits.
However, additional factors include the Independent Power Producers (IPPs) introduced as part of the structural reforms to liberalise the energy markets. In previous tariff hikes, the IPPs submitted requests for hikes of not less than the inflation rate. These requests were factored into applications for tariffs by Eskom that were subsequently approved by NERSA. In April 2023, the IPPs’ tariff request contributed one-third to the total tariff.
Corporatisation, IPPs profit margins and corruption have combined to compel Eskom to raise tariffs to cover costs of operation. This suggests that Eskom shifts its financial burdens onto consumers, particularly households and small businesses. Municipalities rub pepper on the wound when they add surcharges to the electricity they supply to residents.
By prohibiting Eskom from building new generation capacity with the debt-relief, government is aimed at privatising the power generation without genuine decarbonisation plan driven by the public. This approach does not address the underlying issues within the energy sector which are centred around the energy transition and building of renewable capacity. By giving the transition to the private sector, government will subject us to corporate and profit motives which would either exacerbate or retain the energy poverty we have today.
SAFTU wants Free Basic Electricity (FBE) for the working class people. FBE will not be achieved under market competition. This means even the dummy FBE that they claim to be giving to millions of households will be eradicated to make way for market-regulated provision of electricity.