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‘Electricity tariffs could increase by 25% annually’

An analyst says SA pays between 80 cents & R1,20 while BHP Billiton pays 40 cents per kilowatt.

Energy and Mining analyst Ted Blom has told unions NGOs and resident associations from across the country that the electricity crisis was mainly caused by collusion. Picture: Freeimages.com

JOHANNESBURG - A civil society conference on the electricity crisis on Tuesday heard warnings that South Africa's electricity tariffs could increase by around 25 percent every year for the foreseeable future.

Energy and Mining analyst Ted Blom told unions, NGOs and resident associations from across the country that the electricity crisis was mainly caused by collusion.

Blom said South Africans were buying power from Eskom at more than double the price BHP Billiton paid the utility in Mozambique.

He said while South Africans paid between 80 cents and R1,20 per kilowatt hour for electricity, BHP Billiton paid Eskom around 40 cents for the same amount.

"If you run a notional model on Eskom's normalised price increases from 1994, it should not get to a price of above 40 cents a kilowatt, the excess cost is what we are paying for corruption and inefficiency."

But Blom said the problem was not with the mining company.

"Billiton is paying below 40 cents but that price moves every month because it's indexed."

The analyst then accused Eskom of colluding with the National Energy Regulator of South Africa (Nersa).

"I firmly believe Nersa lost its teeth years ago."

Members from Eskom's so-called war room are expected to make submissions Wednesday, while Nersa will present on the final day of the conference.

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