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DA joins calls opposing Eskom tariff hike

Mmusi Maimane says the electricity price hike proposed by Eskom will result in job losses.

Democratic Alliance leader, Mmusi Maimane at Eskom briefing. Picture: Reinart Toerien/EWN.

JOHANNESBURG - Democratic Alliance (DA) leader Mmusi Maimane says the electricity price hike proposed by Eskom will result in job losses and the utility must find an alternative way to obtain funding.

Eskom has applied to the National Energy Regulator of South Africa (Nersa) for a 25,3 percent tariff hike, of which about 12 percent has already been approved.

The utility says it needs more money to keep buying diesel, which is imperative to keep the lights on.

This week Nersa will be holding public hearings about Eskom's proposed tariff hike, but the DA has already come forward strongly opposing this application.

Maimane says if the tariff hike is approved then South Africans will suffer.

"Not only is inflation potentially going to go up but industry and business face the risk of not being able to improve their turnover then this has a significant impact on job losses."

The DA leader says Eskom had promised no load shedding this winter, but this is happening and one of the main reasons it wants customers to pay up is because the Kusile and Medupi power stations are not yet finished.

"I live in Joburg and I have experienced load shedding so Molefe has perhaps misled the people of this country because this winter will be riddled with load shedding."

ENERGY GROUP OPPOSES ESKOM'S PROPOSED TARIFF HIKE

The Energy Intensive User Group is warning a second double-digit increase for electricity proposed this year would make it difficult for South African businesses to compete internationally.

The industry body says power prices in South Africa have risen 70 percent since 2010.

Eskom raised tariffs by just over 12 percent in April and has applied for an additional 12,7 percent hike for July.

The group, which represents major companies in South Africa including Anglogold Ashanti and BHP Billiton, is opposing the price rises.

Meanwhile, after two months in the Eskom acting CEO hot seat, Brian Molefe, said last week the utility had performed 'much better than expected' over the past few months, despite regular load shedding.

He said last month accounted for the majority of rolling blackouts.

"The worst period was in May when stage one load shedding was implemented from 5pm to 10pm in the evenings."

'HIGHER TARIFFS WILL MEAN LESS LOAD SHEDDING'

At the same time, he said higher electricity tariffs would mean less load shedding for South Africans and avoid further damage to the economy.

He argued Eskom applied for additional money to buy diesel which keeps generators running when the power grid was constrained.

Molefe added that without diesel supplies, load shedding would be implemented and this cost the economy far more than what Eskom was asking for.