Businesses must find alternative power sources

An energy expert says there are better ways for Eskom to raise the money it needs.

An energy expert says there are better ways for Eskom to raise the money it needs.

The Cape Chamber of Commerce and Industry on Monday advised businesses to start looking at alternative power sources.

Eskom announced that it has asked the National Energy Regulator of South Africa (Nersa) for a 16 percent tariff hike every year for the next five years.

If Nersa approves Eskom's application, the price of power will increase from the current 61c/kwh to 128c/kwh by 2018.

There has been a largely negative response to the news, with many analysts saying neither consumers nor businesses can afford another increase.

The chamber's Peter Haylett said: "It suggests that they [the prices] were either horribly underpriced to start with or there are inefficiencies that are fairly large in the whole industry and the way they're going about their business."

Eskom CEO Brian Dames said their current tariffs cannot cover the cost of supplying electricity.

FUNDING ALTERNATIVES

Meanwhile, an energy expert says there are better ways for the utility to raise the money it needs, than to hike power prices or borrow the funds.

Energy expert Chris Yelland said it was unfair to expect consumers to bear the full burden of raising the R1 trillion Eskom will need over the next five years.

He said if government was not willing or unable to contribute, it should allow private investors to get involved.

"The government has to move into the modern era of finance. If it is unable to provide the necessary equity itself, it should allow other shareholders to take position."

But South African Chamber of Commerce CEO Neren Rau said this would have a negative impact on government coffers.

"From Eskom's perspective, if they don't rely on the tariffs, there will be implications for the fiscus."

Eskom says it is committed to keeping tariffs as low as possible.