South Africans buying their electricity from municipalities will pay on average 32.6 percent more for power this year.

Eskom on Wednesday was granted an average 13.3 percent tariff increase in addition to the 14.2 percent already approved for this year by the National Energy Regulator of SA (Nersa) bringing the average increase to 27.5 percent for the year.

This would allow Eskom to recover additional costs of R2.827-billion through the tariff hike.

However the utility's municipal customers, which include licensed distributors at municipal level such as municipalities, would pay on average 35.9 percent more from 1 July. But residents would only be required to pay on average 32.6 percent more, which includes the 14.2 percent.

The poor would not be expected to pay more than the 14.2 percent already granted.

"In circumstances where individual municipalities cannot afford to subsidise the poor from the remaining customer base, a mechanism for Eskom to limit the increase to these municipalities must be formulated," Nersa chairperson Collin Matjila said.

Eskom's non-municipal customers, which include the mines, would pay 20 percent more for electricity additional to the 14.2 percent already implemented for them.

The regulator predicted that tariffs would increase between 20 and 25 percent over the next three years.

"We do realise this increase would have an impact on ordinary South Africans and also on business," Matjila said.

However, he said, the negative impact had to be considered against the need to ensure that Eskom remained a "viable entity".

"By sustaining Eskom we're also sustaining the economy," he said.

The regulator recommended that in order for Eskom to maintain a strong balance sheet which would support its credit rating government needed to review what portion of the R60 billion it had budgeted for utility's expansion programme it would spend this year.

Nersa also admitted that a mechanism needed to be developed to take into account unforeseen changes in primary energy cost and other costs.

"The mechanism must also take into account the efficiency of costs; the prudency with which the costs are incurred, Eskom's measures to control these costs and its ability to predict such costs at time of the application," Matjila said.

The regulator said it would amend Eskom's licence to ensure the utility managed its risks efficiently.

Sapa