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Eskom tariff hike: Job losses still a major concern, says Chamber of Mines

Nersa announced a 9.4 percent tariff hike today, allowing the utility to recover R11.2 billion.

Eskom's chairperson Zola Tsotsi revealed the power utility will be suspending four executives as part of an independent inquiry into the business at Megawatt Park in Johannesburg on 12 March 2015. Picture: Reinart Toerien/EWN
eskom,Chamber of Mines,Nersa
Business Local

JOHANNEBSURG - The Chamber of Mines says job losses are still a major concern, despite Eskom not being granted its full claim of R22.8 billion to recover costs and revenue shortfalls. 

The National Energy Regulator of South Africa (Nersa) announced a 9.4 percent tariff hike today, allowing the utility to recover R11.2 billion.

Eskom says the decision puts it in a difficult situation especially when it comes to using open cycle gas turbines which have been used to avoid load shedding.

The chamber’s Charmane Russell says the tariff increase is significantly higher than inflation, but it is far more palatable than Eskom’s request for 16.6 percent hike.

“It’s still higher if you take a look at the fact that electricity prices have gone up by 300 percent in our industry over the last seven years, so certainly there will be an impact.”

This may mean job losses or further restructuring at mining companies.

It may now have to reconsider and do its best to minimise the risk of power outages.

NERSA’S DECISION ‘CAUTIOUSLY WELCOMES’

Minister of Public Enterprises Lynne Brown says she “cautiously welcomes” Nersa’s decision to increase electricity tariff.

CEO Brian Molefe says they were operating the turbines in order to avoid load shedding - and these costs haven't been recovered.

Brown, however, says the tariff hike gives Eskom an indication of what to do in future.

“I cautiously welcome this, just because it gives Eskom certainty as to what they can expect into the future. But in terms of the unsustainability I will have to look at it in a lot more detail.” 

(Edited by Winnie Theletsane)

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