South Africa\u2019s government is considering measures to offset a proposed power-price hike, including delaying plans to raise carbon taxes, Electricity Minister Kgosientsho Ramokgopa said.<\/p>\n\n\n\n
The authorities will make a submission on the need for costs to be increased by less than the 36% sought by state power utility Eskom, Ramokgopa said at a conference in Cape Town on Thursday. The minister signaled earlier this week that the government plans to intervene to keep prices down.<\/p>\n\n\n\n
If Eskom\u2019s application was granted, hiking power prices by more than a third would exacerbate energy inequality and render businesses uncompetitive, he said. \u201cIt\u2019s in our collective interest to resolve that issue.\u201d<\/p>\n\n\n\n
Eskom\u2019s tariff application for its next financial year is the latest impediment to economic growth presented by South Africa\u2019s struggles with power supply. <\/p>\n\n\n\n
While rolling blackouts that hit Africa\u2019s biggest economy intermittently since 2008 were brought to a halt about six months ago, electricity costs have risen 600% since 2006.<\/p>\n\n\n\n
The power utility has said its application is based on the costs it will incur to provide electricity. It\u2019s also applied for an 11.8% increase in its 2027 financial year and 9.1% hike the following year.<\/p>\n\n\n\n
While the government will be careful not to interfere in the process by which the National Energy Regulator of South Africa determines the tariff increase, it will make a case for lower increase, Ramokgopa said.<\/p>\n\n\n\n
\u201cI\u2019m going to be a participant\u201d in the Nersa process \u201cand then they\u2019ll know\u201d where the policymaker stands, Ramokgopa told reporters at a briefing after his speech.<\/p>\n\n\n\n
While carbon taxes for South Africa\u2019s top emitters like Eskom have increased, the current rate is still a fraction of what the World Bank\u2019s High-Level Commission on Carbon Prices estimates it should be. <\/p>\n\n\n\n
The National Treasury proposed in February that carbon taxes be increased.<\/p>\n\n\n\n
\u201cWe know what the immediate implications are, it can create an impression that we\u2019re going back on our nationally determined contributions,\u201d the minister said, referring to a long-term emissions reduction plan South Africa has submitted to the United Nations.<\/p>\n\n\n\n
\u201cYou\u2019re not cancelling, you\u2019re delaying. Of course introduce it and then people are into poverty so of course those are the difficult choices that we have to make.\u201d<\/p>\n\n\n\n
South Africa has already delayed the closure of three coal-fired power plants, imperiling its NDC target. Eskom accounts for about two fifths of the country\u2019s greenhouse-gas emissions.<\/p>\n\n\n\n
Ramokgopa said the ministry also plans to make a submission on the return-on-assets Eskom aims for, which could affect the amount of profit it makes relative to the assets it holds, \u201cwithout necessarily undermining their ability to meet their obligation.\u201d<\/p>\n\n\n\n
After Nersa decides on Eskom\u2019s application, the electricity ministry will seek \u201cadditional relief we can give to the poor,\u201d including revising upwards the amount of free basic electricity they receive, Ramokgopa said. <\/p>\n\n\n\n
The amount by which the 50 kilowatt-hour-per-month allowance can be increased is being researched by the department, he said.<\/p>\n\n\n\n
That\u2019s well under the amount of power used by the poorest households, estimated at 200 kilowatt-hours-per-month by Johannesburg\u2019s EE Business Intelligence, and Ramokgopa has said that only a fraction of those entitled to free electricity actually get it.<\/p>\n\n\n\n