Eskom’s\u00a0 selective reopener application to hike the electricity tariff by an extra 9.58%, has been denied.<\/p>\n
The National Energy Regulator (Nersa) announced in early May that it had received Eskom\u2019s application for the re-opening of tariff negotiations for 2015\/16.<\/p>\n
Nersa\u2019s Chairperson Jacob Modise said on Monday (29 June), that higher prices of electricity would result in job losses.<\/p>\n
Further, he said that Eskom’s application does not comply with the Municipal Financial Management Act, adding that the power utility must re-submit an application that complies with certain laws, or submit a new one altogether.<\/p>\n
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.<\/p>\n
Eskom “stripped” out the environmental levy from its application because this levy needs to be passed by Parliament first.<\/p>\n
Included, the environmental levy would have pushed up tariffs to 24.78%.<\/p>\n
Eskom came up against stiff opposition last week, when Nersa held public hearings to debate the need for a further tariff increase.<\/p>\n
Experts, business leaders and politicians gave presentations to the Nersa panel, pleading for it to find alternatives to a further tariff increase.<\/p>\n
Energy expert Chris Yelland told the panel that the price increase was worse than it seemed and would actually total 31.61%.<\/p>\n
“The question of affordability to the economy and to electricity customers has not been considered by Eskom at all,\u201d he said.<\/p>\n
However, acting Eskom CEO Brian Molefe painted a gloomy picture if the increase was not implemented.<\/p>\n
\u201cIf South Africa is not prepared to cough up R15 billion more for diesel, the cost of load shedding will be far higher than that,\u201d he warned.<\/p>\n
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.<\/p>\n
Molefe was shocked to discover at the hearings that an increase could only by implemented in 2016, as per correspondence between Eskom and Treasury revealed, unbeknown to the acting chief.<\/p>\n
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.<\/p>\n
“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.<\/p>\n
Reporting with News24<\/a><\/p>\n Eskom price hike chances looking slim<\/a><\/strong><\/p>\n Eskom needs tariff increase because load shedding is expensive: CEO<\/a><\/strong><\/p>\nMore on Eskom<\/h3>\n