Electricity tariffs could rise by 16% - TechCentral

Electricity tariffs could rise by 16%

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All cities in South Africa will face an electricity tariff increase of at least 16% in July if Eskom is granted a R22,8bn adjustment for the 2013/2014 financial year, according to Leslie Rencontre, director of electricity at the City of Cape Town.

Eskom made a regulatory clearing account (RCA) application for this amount to energy regulator Nersa on Monday.

In reaction to Eskom’s application, Rencontre told the Nersa panel it would mean an additional 8,6% increase over and above the already approved multi-year price determination increase of 8%, should Eskom be granted the full amount applied for.

“The Eskom increase would have to be passed on to city customers through increased city electricity tariffs from July 1 2016,” warned Rencontre.

The bulk of the R22,8bn adjustment Eskom is asking for is made up of reduced revenues of R11,7bn and increased primary energy costs of R14,4bn.

“Electricity prices are already high for business and residential consumers, including the poor,” Rencontre said.

“Any additional increase approved by Nersa will have a further negative impact on Cape Town’s economy.”

In his view, the R11,7bn reduction in revenue that Eskom experienced during the 2013/2014 financial year should be offset by the R7,1bn profit it reported during that financial year.

“An additional tariff increase for customers who heeded the call to save energy would be like charging them for saving electricity,” said Rencontre.

On top of that, he claimed that delays in the building of the Medupi and Kusile power stations, for instance, were “consequences of Eskom policy and decision making” and should not be passed on to consumers.

In his view, the additional R8bn claimed by Eskom for open-cycle gas turbine costs should be offset by the energy lost due to delays at Medupi and Kusile as well budgeted availability of existing plants.

He said the city had budgeted for a decrease in energy spend over the medium term as he doubted there would be a 3% growth in energy demand in the city, as seen before. Therefore, he foresaw an extended period of lack of increase in energy sales at the city.

“The state being Eskom’s shareholder makes this a difficult situation as the pain of Eskom will then have to be taken by all citizens,” said Rencontre.

“If Eskom was a private company, on the other hand, then its shareholders would have had to take the pain.”

Nersa regulator Thembani Bukula said it would do what was in the best interest of Eskom, as well as South Africa.  — Fin24

4 Comments

  1. The real world increase will be 20%. After all us rate payers will be forced to pay into the ANC executive mayor’s new car fund via the new power tariff’s scam.
    That 20% electricity hike will in turn tip tens of thousands of small business guys and farmers into either bankruptcy or serious staff cuts which will impact right along the financial food chain into a devastating collapse in employment from which there will be no recovery at all.
    Where Blade is going to find his Fairy God Mother university Robin Hood tuition fees promises from only the Good Lord knows.
    Enjoy these time we are experiencing now as they will come to be known as the GOOD OLD DAYS. Do you think those farmers out there are not going to add the increased power hike onto your potatoes bill? Believe me, Eskom will take us right back to the pre industrial era with this madness.
    Electricity, instead of being a tool for progress will become listed in the luxury items basket.

  2. “An additional tariff increase for customers who heeded the call to save energy would be like charging them for saving electricity,” said Rencontre. This is not a concept understood by Eskom.

  3. the ANC needs every cent it can get from us the oppressed tax paying minority – so this is just the tip of the proverbial iceberg, just wait for the budget next month.

    Zuma, like Mugabe, has expensive tastes, a big mouth and no humility or sense of honor to speak of – welcome to the new NEW South Africa.

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