Massive R2,000 electricity bill shock

Massive R2,000 electricity bill shock for South Africans

Electricity minister Kgosientsho Ramokgopa says that the typical Eskom customer would have seen their electricity bill shoot up by almost 180% over the last decade.

Responding to a parliamentary Q&A regarding escalating prices, the minister said that Eskom’s cost of electricity generation has risen significantly over the past 20 years, driven by factors like infrastructure investments, maintenance, fuel costs and other operational expenses.

A typical Eskom customer using around 800 kWh per month would have seen a bill of around R1,055 per month in 2014 skyrocket to about R2,950 in 2024 – an increase of close to R2,000.

Ramokgopa said his ministry is “actively working” to reduce the inflationary pressure on end users through various initiatives.

One of the key interventions is the Free Basic Electricty (FBE) policy, which provides indigent households 50 kWh of free electricity per month. He said the ministry is exploring an increase in the allocation of between 150 kWh to 200 kWh.

Beyond interventions for poor households, the ministry is also driving the expansion of renewable energy through its REIPPPP, and supporting Eskom’s efforts to improve its operations and mitigate rising costs.

With renewable energy, the minister said that some solar projects from independent power producers are achieving prices as low as 56 cents per kWh, while wind projects are achieving around 62 cents per kWh. This is significantly lower than the R2.49 per kWh some residential customers (using 600 kWh per month) are paying Eskom.

Plan to cut prices

Eskom has applied to energy regulator Nersa for massive price hikes through 2027, which will effectively see prices climb 66% over the period.

This includes:

  • 36.15% on April 1, 2025;
  • 11.91% on April 1, 2026;
  • 9.1% on April 1, 2027.

Nersa’s energy council is expected to deliberate and announce its decision regarding the application around the end of January.

The application has been met with widespread backlash from municipalities, civil organisations and society at large, lamenting the impact of escalating electricity tariff increases on the cost of living.

Ramokgopa previously stated that price hikes are unsustainable and untenable and promised government intervention to mitigate the costs.

In his parliamentary response, Ramokgopa alluded to a longer-term intervention, saying that reducing Eskom’s debt burden—as seen with Treasury taking over R250 billion of Eskom’s debt—will go a long way in reducing price pressure.

“By addressing legacy debt stemming from historical inefficiencies and corruption, the plan will allow Eskom to re-enter the debt capital markets in a much stronger financial position,” he said.

“The improved standing will enable Eskom to secure funding at lower interest rates, thereby reducing the overall cost of borrowing. Lower financing costs directly translate to the containment of Eskom’s cost-reflective tariff, ensuring prices remain within the affordability of end-customers.

The minister said this would not only restore Eskom’s credibility with investors but also alleviate pricing pressure.

However, this appears to be a long-term solution rather than a direct intervention aimed at alleviating pricing pressures right now.

Ramokgopa warned that the rising cost of electricity is an existential problem for South Africa that risks sparking social unrest and threatening the country’s national security.