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Eskom: We’ll do our best to reduce load shedding

Nersa today approved a 9.4 percent tariff hike, which means Eskom can recover R11.2 billion.

The new head of South African business group BUSA said on 7 May, he was “quite happy” about the country’s electricity crisis, despite the power cuts and disruption, as it will result in needed change. Picture: AFP
eskom,Eskom tariff hikes,Eskom tariff increases
Local Business

JOHANNESBURG – Eskom CEO Brian Molefe says the utility will do its best to reduce the risk of load shedding but says it hasn't been able to fully recover costs incurred for electricity production.

The National Energy Regulator of South Africa (Nersa) today approved a 9.4 percent tariff hike, which means Eskom can recover R11.2 billion - only about half of what it was asking for.

Tariffs will be increased by 9.4 percent for the 2016/17 year only.

Public hearings were held across the country earlier this year. Nersa says it took all submissions into account.

Big business, the mining sector and civil society groups strongly opposed a tariff increase, but the ailing utility said it needed a 16.6 percent hike to recover R22.8 billion.

In a statement released this afternoon, Molefe emphasised that the use of open cycle gas turbines will guide the utility in terms of balancing supply and demand, in a bid to avoid load shedding.

Eskom had asked for R8 billion to recover costs from using the turbines but was only granted R1.2 billion.

Nersa's Jacob Modise said, “Our challenge still remains regulating the energy industry in a manner that balances the interest of the energy producers and customers. This is never an easy task, for inevitably it’s influenced by the greater economic environment and as directed by the policy environment of government.” 

ESKOM GOING BACK TO DRAWING BOARD

Eskom says it’s going to have to go back to the drawing board to try and figure out how it can recover costs and minimise the risk of load shedding.

Nersa's Jacob Modise says when it comes to the use of open cycle gas turbines, which uses diesel, Eskom had applied to recover R8 billion.

“The national regulator has allowed Eskom to recover only R1,3 billion.” 

Eskom's Khulu Phasiwe says they used the turbines in order to keep the lights on but they may now have to reconsider.

“It will be difficult for us to decide to use diesel because there is no guarantee that we will get our money back.”

Meanwhile, the Chamber of Mines says while the tariff hike is lower than Eskom’s requested amount - it’s still going to have a major impact on the mining industry.

(Edited by Refilwe Pitjeng)

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