Analysts say this move could see the cost of electricity rising by between 10 and 19.4%, reports Business Report.
Nersa said it had approved Eskom’s liquidation of the Third Multi-Year Price Determination (MYPD3) Regulatory Clearing Account balances for the 2014 to 2018 financial years over a four-year period.
Nersa has granted Eskom a 4.1% increase effective April next year under the regulatory clearing account.
Eskom has also applied for a 15% tariff increase, which Nersa is considering, although the actual increase - which will come into effect in April next year - could be higher or lower.
The move comes as the cost of fuel, one of the major factors stalling economic growth, went up yesterday, heralding a litany of other price increases in the food basket, energy mix and inflationary pressures.
“The impact will be very significant; consumers can expect at least a double inflation increase next year, it will certainly tip over the inflation rate,” energy analyst Chris Yelland said.
Ted Blom, a partner at Mining and Energy Advisors, said the decision would burden an already overloaded consumer with additional costs prematurely.
Blom said the recovery period included the “Gupta years” under former president Jacob Zuma’s administration, when confidence was low and there was reportedly looting at state-owned enterprises, especially Eskom.
“There should first have been a forensic audit into Eskom’s expenditure during that period so it is clear where the money being recovered went to,” Blom said.