Social Unrest Feared Over Eskom’s Massive Price Hikes, Says City Power

South Africa faces growing concerns over potential social unrest as Eskom proposes substantial electricity price increases through 2027. City Power, Johannesburg’s municipal power utility, has urged the National Energy Regulator of South Africa (Nersa) to cap these increases at 11% annually, warning of dire consequences for communities if the hikes proceed as planned.

Eskom’s Proposed Tariff Increases

Eskom’s Multi-Year Price Determination (MYPD6) application outlines cumulative increases of 66% over the next three years, including:

• 36.15% in April 2025,
• 11.91% in April 2026, and
• 9.1% in April 2027.

The plan has drawn widespread backlash from municipalities, civil organizations, and the general public, citing the devastating impact on the cost of living.

City Power’s Appeal for a Balanced Approach

City Power’s submission to Nersa highlighted the alarming consequences of unchecked price hikes:

• Increased poverty and unemployment.
• Strain on the economic stability and social fabric of communities.
• Escalation in social unrest due to rising financial pressure on households.

City Power emphasized the recent 12.75% tariff hike, which already burdens residents, pushing many to economic hardship.

“The potential for further increases of this magnitude is not only unsustainable but also morally unacceptable,” said City Power.

Proposed Alternatives

City Power has proposed that Nersa cap Eskom’s tariff hikes at 11% annually. This balanced approach would:

• Provide Eskom with above-inflation increases to address its financial challenges.
• Offer stability and predictability to consumers already under financial strain.
• Encourage Eskom to address operational inefficiencies and improve cost management.

The utility argued that Eskom’s inefficiencies—such as over-reliance on gas turbines, delays in renewable energy projects, and carbon tax mismanagement—must be rectified before burdening consumers further.

Economic and Social Implications

Civil organizations and other stakeholders have echoed City Power’s concerns. They argue that escalating tariffs without addressing inefficiencies will exacerbate financial challenges for municipalities and their customers.

“Cost-reflectivity should not be a moving target. Eskom must demonstrate responsibility in managing its costs efficiently,” City Power stated.

City Power’s plea to Nersa includes:

• A fair and manageable tariff structure reflective of economic realities.
• Measures to ensure Eskom’s financial sustainability without compromising municipal and public interests.

The outcome of these discussions will have far-reaching implications for South Africa’s energy sector, economic stability, and social harmony.