Eskom CEO Dan Marokane has again pledged that the state-owned power utility will hold future electricity tariff hikes to single-digit increases, a major shift in tone from earlier double-digit increases that have rattled consumers and businesses, pressured economic growth, and fuelled inflation.
Speaking in an interview with Newzroom Afrika, Marokane said Eskom has accepted it must “live within” annual increases of less than 10% to support South Africa’s economic recovery. Annual consumer price inflation in July was 3.5%.
“We are certain that we will be asking nothing more than a single-digit increase going forward,” Marokane said. “That requires us to do a lot internally in terms of driving cost efficiencies. We are revisiting procurement, compressing costs and renegotiating with suppliers to make sure we remain sustainable while keeping electricity affordable.”
However, Marokane acknowledged that Eskom will seek to recover R54-billion after energy regulator Nersa’s recent regulatory blunder, which led it to underestimating the utility’s revenue requirement by R54-billion over three years. That error, for which Nersa has apologised, will be passed on to electricity users.
But rather than dumping this amount on consumers in one go, Marokane said Eskom will adopt a phased approach to recovering the money.
“The first thing is to get the granting of the R54-billion, which has been done. The second is agreeing on how to liquidate that over time, taking into consideration the impact it will have on consumers,” he said.
The issue feeds into a broader review of South Africa’s electricity pricing policy, which government has promised will be completed by June 2026. That review will balance affordability for households, competitiveness for industries and Eskom’s long-term sustainability.
Illegal connections
Even with tariff relief on the table, Eskom is battling enormous revenue losses from electricity theft. Marokane revealed that illegal connections and other non-technical losses cost Eskom between R15-billion and R20-billion annually.
These thefts also overload infrastructure. “It is, as a matter of fact, the illegal connections that are contributing towards the overloading of transformers that then lead to load reduction,” he said. Load reduction – cutting supply in certain areas to protect equipment – has persisted even as load shedding has eased.
Read: South Africa should be spared summer blackouts
Part of the problem, Marokane said, lies with an outdated free basic electricity policy. Of the 10 million households classified as indigent and eligible for free power, only two million are receiving it. Moreover, the allocation itself – set 15 years ago – no longer reflects modern household needs.
“We argue that the number needs to be increased to ensure indigent people are not forced into illegal connections,” Marokane said. Eskom is lobbying government for a review of the policy to better protect vulnerable consumers while reducing theft-driven revenue losses.
Marokane also addressed the controversy around mining companies paying lower tariffs than households through negotiated pricing agreements. He defended the practice, saying it keeps mines competitive globally and helps preserve jobs, but conceded that it will be scrutinised as part of the pricing review.
“The review will really look at how you balance all these aspects – individual households, economic activities in manufacturing and industry, and making sure Eskom as a business remains sustainable,” he said. – © 2025 NewsCentral Media
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