Eskom price hike chances looking slim
Public Enterprises Minister Lynne Brown says that Eskom will raise more debt should it fail to receive permission from the National Energy Regulator of SA (Nersa) to raise tariffs by a further 12.61% when the regulator makes its announcement on Monday afternoon‚ the newspaper reported.
The prospects of success for Eskom look slim. It has asked the regulator to grant a 25.3% increase from July 1 (Wednesday)‚ which includes the 12.69% already agreed to by Nersa through previous regulatory processes.
However‚ it emerged during hearings last week that the Treasury would not allow municipalities to raise tariffs more than the already agreed 12.69% until next July as they had already finalised their budgets.
“If Nersa doesn’t give the increase then Eskom will have to re-examine its finances and go out and borrow‚” Ms Brown said in an interview on Sunday.
According to a report by the Sunday Times, a directive came to light during presentations at the public hearings at Nersa last week stating that further increases in tariffs this year were out of the question as municipalities have not made provisions for them in their budgets.
Acting Eskom CEO, Brian Molefe, had not been aware of the directive, the paper said.
There are loopholes to get around the directive, however there has been little support from the public, business and even political players to approve the price hike.
At the same hearings, 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.
Molefe told the panel that the price increases were necessary as load shedding was expensive. He also noted that the two options were for consumers and businesses to pay up, or to face more blackouts.
He insisted that worse load shedding was six times more damaging to the economy than the tariff increase the utility was seeking.
With RDM News Wire.
More on Eskom
Eskom needs tariff increase because load shedding is expensive: CEO
Eskom electricity price hike will actually be 31.61%: energy expert
Loading ...