Eskom - Price hike denied

The selective reopener application of 9.58% by Eskom has been denied by The National Energy Regulator (Nersa)

Nersa’s Chairperson Jacob Modise said that the higher prices of electricity would result in job losses, adding that the application does not comply with the Municipal Financial Management Act and therefore Eskom must re-submit an application that complies with certain laws, or submit a new one altogether.

Eskom needs R32.9 billion to supplement its generation capacity with open-cycle gas turbines and R19.9 billion for its short-term power-purchasing programme and the impact of the increase in environmental levy.

Eskom “stripped” out the environmental levy from its application because this levy needs to be passed by Parliament first.Included, the environmental levy would have pushed up tariffs to 24.78%.

Eskom came up against stiff opposition last week, when Nersa held public hearings to debate the need for a further tariff increase. Experts, business leaders and politicians gave presentations to the Nersa panel, pleading for it to find alternatives to a further tariff increase.

Energy expert Chris Yelland told the panel that the price increase was worse than it seemed and would actually total 31.61%.

“The question of affordability to the economy and to electricity customers has not been considered by Eskom at all,” he said. However, acting Eskom CEO Brian Molefe painted a gloomy picture if the increase was not implemented.

“If South Africa is not prepared to cough up R15 billion more for diesel, the cost of load shedding will be far higher than that,” he warned.

He and Thava Govender, Eskom group executive for generation, warned South Africa more load shedding was on the cards if the increase was not granted.

Molefe was shocked to discover at the hearings that an increase could only be implemented in 2016, as per correspondence between Eskom and Treasury revealed, unbeknown to the acting chief.

On Monday, Public Enterprises Minister Lynne Brown was quoted as saying that Eskom will have to tap debt markets if it fails to get the tariff increase.

“If Nersa doesn’t give the increase then Eskom will have to re-examine its finances and go out and borrow,” Brown was quoted as saying in the Business Day newspaper.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Mar 2018
      If a landlord opts to use a managing agent for the rental of his or her property, the inspection process can be easier as the agent is not emotionally involved and will certainly have concluded an in-depth inspection report in the interests of all parties.
    • 19 Mar 2018
      We all wish we could have the cheat sheet for selling a property – a simple Ctrl+Shift+C code that will magically secure an offer on your home in an instant. Though it is not possible to provide you with this cheat code (sadly, reality does not come with such perks), it is possible to provide you with a list of the most common blunders some of your neighbours have committed in their efforts to sell their homes
    • 19 Mar 2018
      Although property technology is now widely accepted as an established trend, especially in the international real estate arena, the industry has been cautious to advance and smaller markets like South Africa are still hesitantly dipping their toes in the water.
    • 16 Mar 2018
      Strange as it may seem, there is a stock shortage looming now in the luxury sector of the Johannesburg property market, because astute buyers have for the past few months been hurrying to snap up high-end homes being offered at excellent prices.
    • 16 Mar 2018
      No one likes having to claim but having insurance for your household contents is vital, and at the start of a new financial year, homeowners either applying for new household insurance or revising their existing insurance should take a comprehensive inventory of their possessions and keep track of the total value.
    • 15 Mar 2018
      First-time buyers typically need to save for at least three years to afford the deposit on a home, and the VAT and fuel price increases announced in this year’s budget are going to make it even more difficult for them to reach that goal.
    • 15 Mar 2018
      Sea Point shows how developers use these organisations to advance their own interests
    • 15 Mar 2018
      As the rand strengthens against other major currencies, the prospect of investing in properties abroad is an increasingly appealing option for South African investors. Several factors, local and international, are sending a clear message: now is the time.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us