Eskom does not set its own price, and the price has still risen faster than almost anything else South Africans buy. The average unit it sold cost 24.7 cents in 2008/09, and by March this year it cost 241.64 cents, on figures Daily Investor published from the data firm Codera Analytics. That is about 14.5% a year since 2008, against consumer inflation of roughly 5%.
Stacked up, the gap is the whole story: tariffs up 973% since 2008, consumer prices up 241%. On the same arithmetic, electricity reaches ten times its 2008 level by the end of the 2026/27 financial year, with the rest of the shopping basket at about two and a half.
The two decades when power got cheaper
None of this is how it always worked. Eskom's increases tracked inflation from at least as far back as 1994, and the independent analyst PowerOptimal, working off Eskom's published tariffs and Stats SA's inflation history, finds tariffs rose 223% between 1988 and 2007 while inflation ran to 335%. Power got cheaper in real terms for two decades, partly because policy kept it affordable for poor communities, partly because Eskom had electricity to spare in the 1990s and built nothing new in the 2000s. PowerOptimal puts the break in the same year Codera does, 2008.
What the increases were buying
The regulator signed off every one of them. Nersa approved 5.9% for the 2007/08 year, roughly where inflation was, and 14.2% for the year after. Eskom then asked for a 60% revision to cover rising production costs and its capital expansion.
It got another 13.3% in June 2008, which took that year to 27.5%, and then 31.3% for FY2010 with mid-20s increases through to FY2013.
Eskom's reason for asking has not changed in twenty years. In 2005 it said prices were unsustainably low and that a new fossil-fuel station costs six to seven times what an existing one does, so the cost of new capacity would have to show up in the price. By 2020 the argument had hardened: without a price that covers its costs, Eskom stays dependent on government support, which means the taxpayer covers the shortfall instead. In between it built Medupi, Kusile and Ingula and expanded the transmission grid, and much of the R328 billion of state-guaranteed debt on its books traces to that programme.
One caveat travels with every number here. These are averages across Eskom's standard tariffs, and what lands on a particular bill depends on the type of customer and the municipality in between. The increases already approved run at 8.76% from this April and 9.19% next year. Eskom's next application to Nersa covers the years from 2029, and it says that is where it will ask for a retail tariff that is both cost-reflective for it and more affordable for everyone paying it.
