Eskom applies for 34% tariff increase

State-owned electricity company Eskom is likely to apply to the National Energy Regulator of SA (Nersa) for a 34% increase in electricity tariffs for the coming year, Business Day reported on
Monday.

This was a lot less than the 88% it was considering just a few weeks ago, the newspaper said.

The 34%—mainly to cover increases in operating costs rather than the cost of its new building programme—would be “roughly in line with the real increase of about 25% a year agreed on at last year’s National Electricity Summit and takes account of the damage an excessive hike could do to an economy expected to show hardly any growth this year”.

According to the paper, Eskom’s board is due to meet this week on its application, which was supposed to have been submitted to Nersa in October.

Time was running out because the current tariff determination expired on Tuesday, the report said—and Nersa had to hold public hearings before deciding on the next, three-year, tariff determination.

Business Day cited Eskom chairperson Bobby Godsell as saying the parastatal was likely to submit its application “soon”, but emphasised
that the board had made no decisions on the application.

He declined to comment on what the increases might be.

He said Eskom had been seeking a price for electricity that would recover the full operating cost of providing it.

“We think that is important, not only for Eskom itself, but also to allow independent power producers to produce electricity and co-generators to sell in the market at a realistic price.

“It is also important for demand-side management—because the most sensible way to promote energy efficiency is to have electricity realistically priced, Godsell said. - Sapa

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