Eskom proposes a huge 17 per cent hike tariffs
If Eskom's application is successful, the electricity tariff will increase by 17 per cent from April 1, as opposed to the current increase set at eight per cent.
MBOMBELA – Eskom is planning to increase electricity tariffs by a whopping 17 per cent from April. The South African National Energy Regulator (Nersa) is holding public hearings on Eskom’s application to recoup R22,8 billion through a regulatory clearing account.
The hearings will focus on, among other things, the utility’s intention to recoup costs amounting to eight billion rand which it had spent on diesel during the 2013/14 financial year. Eskom last week said an approval of the application would improve its ability to meet financial commitments and enhance its balance sheet.
“Investors are seeking certainty and stability from the regulatory process. Eskom has recently been downgraded by rating agencies and they note inadequate tariff increases as part of the reason for the downgrade,” said Eskom in a statement.
“A favourable regulatory clearing account process will improve investor confidence, which impacts our credit rating and funding security. Funding security ensures that the building programme remains on course for completion. Sufficient revenue allows Eskom to continue with the generation performance improvement programme to the benefit of all customers. A financially sustainable Eskom will support our country’s broader economic objectives,” said the utility.
Eskom’s 2013/14 RCA submission of R22,8 billion is driven substantially by revenue under-recoveries, higher expenditure on coal burn, independent power producers, open cycle gas turbines and other primary energy costs.
If Eskom’s application is successful, the electricity tariff will increase by 17 per cent from April 1, as opposed to the current increase set at eight per cent.
