'SA pays too little for electricity'
Eskom says its application for a 16 percent price increase is “crucial to ensure economic growth”.
JOHANNESBURG - South Africans must accept that they have been paying too little for electricity, Eskom said on Monday.
The power utility said its application for a double digit price increase is "crucial to ensure economic growth".
Earlier, Eskom announced that it asked the National Energy Regulator of South Africa (Nersa) to increase tariffs by 16 percent every year, for the next five years.
If approved, the hike will start in April 2013.
Addressing the media at Megawatt Park in Midrand, Eskom CEO Brian Dames said the power producer must provide the country with a secure supply of electricity.
He said this should happen despite the negative economic climate.
"We must invest in infrastructure to ensure future growth. Tariffs are the most fairest and efficient way to pay for electricity."
Dames said current tariffs do not cover the costs of producing power.
The CEO said Eskom cannot fund crucial infrastructure development and maintenance projects with current tariffs.
Dames encouraged South Africans to participate in Nersa's public hearings to be held in January, which will deal with the price tariff application.
Nersa must finalise its decision in February, so Parliament can approve the increases before April.