Johannesburg - An electricity tariff hike of 8% over the next five years will present difficulties, Eskom said on Thursday.
"We will be studying the decision in detail to understand its consequences and impact for Eskom," spokesperson Hilary Joffe said.
"We have noted the decision and it will present a challenge for Eskom."
However, Eskom would endeavour to keep the country's lights on.
"We will now be looking at how we can meet this challenge."
Eskom had applied for a 16% increase in electricity prices in each of the next five years.
This was more than double the current price, taking it from 61 cents a kilowatt hour in 2012/13, to 128 cents a kWh in 2017/18.
The National Energy Regulator of SA said its decision was based on facts, adding that a detailed analysis had been done.
The Federation of Unions of SA was pleased with the lower tariff rate.
"We welcome the 8% increase.... Although the increase will still be felt by working people, we feel that this is much better than the 16% requested by Eskom," said Fedusa general secretary Dennis George.
He said the decreased rate will impact on inflation.
George said the 8% was exactly half of Eskom's bid and this meant electricity, which cost 65c per kilowatt hour in 2013, would cost 89c per kilowatt hour by 2018.
Western Cape Finance MEC Alan Winde welcomed Nersa's decision.
"While we understand that the country is experiencing a shortage of
energy... Eskom needs to look at innovative ways of producing electricity, such
as renewable energy," he said in a statement.
He said renewable energy was one of the biggest investment opportunities in
the Western Cape.
"We expect that between 40% and 50% of wind power projects in
South Africa and 15% of solar energy projects will be set up in the
Western Cape by 2014, to provide for about 10% of our region's energy
Winde said the tariff hike would have the greatest affect on the already
"over-burdened" consumer and entrepreneurs operating in the small,
medium and micro enterprise sector.