12.7 percent hike in electricity prices loom
JOBURG _ Consumers will be hit with a 12.7 percent electricity tariff hike next year.
This was announced by the National Energy Regulator of South Africa (Nersa) which said Eskom would be able to raise electricity prices by 12.7 percent for the 2015/16 financial year.
Nersa approved Eskom’s plans to recoup losses after it had under-recovered money during the multi-year-price-determination-2 control period between 2010 and 2013.
Nersa allowed the power utility to raise electricity prices by 4.7 percentage points above the eight percent tariff increase it was previously granted, in order to help it recover R7.8 billion in unbudgeted costs in the tariff period 2010/1-2012/13.
The increase was double the rate of inflation, which according to the Reserve Bank was expected to average 6.2 percent for the year.
The increase will take effect on 1 April 2015 for consumers who purchase directly from the state-owned power utility, while municipal customers will pay the increased tariff from 1 July 2015.
“If Eskom realises the increase that was approved, that will have an impact on municipalities, so what we need is to engage with the regulator to be able to compute as to what would be the impact of that increase on our bulk purchases,” managing director of City Power Sicelo Xulu said.
“Then certainly we’d be able to announce that and go through a public participation process … to be able to then decide how we need to increase our tariffs.”
However, Xulu said, that would need to be approved by the city council.
He noted that tariff increases were likely to have an impact on collection and therefore, customers needed to be educated of the importance of paying for services.
“We need to continuously work together with the regulator, with Eskom, with the municipalities, to make sure that we create an understanding that we will have to pay for the services that we are using,” he said.
