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
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us