There is needs in Eskom to increase electricity prices to meet the cost of producing the power it provides to South Africans. The power utility said “As is evident Eskom is not recovering the efficient cost of the electricity.” This is because the price of Eskom electricity is below the efficient cost that it takes to produce that electricity.
Eskom is working with the national energy regulator of South Africa (NERSA) to raise electricity tariffs to a level where it will be able to recover the efficient cost of the electricity from consumers.
Demand Projections and Municipal Prices
Eskom’s current demand projections are based on all currently known factors, including the staggered reopening of the economy on accordance with the government’s plan. The demand remains significantly lower than what can normally be expected during the winter period, however, Eskom is experiencing an increase in demand s the COVID-19 restrictions are gradually relaxed but do not expect to have demand levels similar to previous years.
Eskom said that “they required to make applications for revenue and the regulatory clearing account” and NERSA will make determinations for electricity price increases in accordance with its mandate.
The power utility also noted that municipality undergo similar approval processes from NERSA,
“The difference is, however, that municipalities are in a position to allow for surcharges that could in effect further increase the price of electricity” said Eskom.