Nersa, the National Energy Regulator of SA, will announce its decision on Eskom’s tariff application on Wednesday. A media briefing will take place at noon in Pretoria at which Nersa will give its view on the “multi-year price determination” for the next three years.

State-owned electricity utility Eskom has applied for a price increase of 35% every year for three years to help raise funds for a R385bn power expansion programme. Prior to this application, it had demanded an annual 45% hike but reviewed the application after strong protests from major mining companies. Last year, Eskom increased its tariffs by 31 percent.

In January, Nersa held public hearings in all provinces on the tariff application.

Mpho Makwana, acting CEO of Eskom, told the hearing in Polokwane that South Africans should absorb the shock of the increase now. “We know this is a bitter pill we are asking the nation to swallow, but we will all ultimately benefit,” he told the Nersa meeting.

Business Unity SA (Busa) CEO Jerry Vilakazi told Nersa’s hearing in Gauteng that if the increase was accepted by Nersa, “we can wave goodbye to an immediate recovery for SA’s economy”. SA recently emerged from its first recession in 17 years.

The Congress of SA Trade Unions, the SA Communist Party, the SA National Civic Organisation, the Young Communist League and the Treatment Action Campaign have all alleged that Nersa has already taken a decision to grant Eskom its 35 percent increase and the public hearings were meant to just comply with the law.

Meanwhile the SA Chamber of Commerce and Industry (Sacci) has estimated that the 35% tariff hike could push inflation up by around 0,3 percentage points. — Sapa