UNDERSTANDING ELECTRICITY PRICING

The price of Eskom electricity is based on approved costs and a return on investment that is determined and regulated by the National Energy Regulator of South Africa (NERSA). CEO of energy management company, All Power Systems, Jay Naidoo, explains, “The amount that makes up a tariff is based on a business model, and it ensures that Eskom is funded. It pays for salaries, bills, coal, distribution, maintenance of the generation of electricity and power stations, and the infrastructure. Tariffs are how Eskom and local municipalities bill you for the supply of electricity.”