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Several organisations oppose Eskom's proposed tariff hike

Several organisations and businesses made presentations strongly opposing Eskom's proposed tariff hike.

Nersa's public hearings for Eskom's application for a 25,3 percent tariff hike in Nasrec on 23 June 2015. Picture: Gia Nicolaides/EWN.

JOHANNESBURG - Several organisations and businesses have made presentations strongly opposing Eskom's application for a 25,3 percent tariff hike.

The National Energy Regulator of South Africa (Nersa) is holding public hearings at Nasrec, on Tuesday and Wednesday before making its decision.

About 12 percent has already been approved and Eskom has argued that it needs more funds to buy diesel to keep the lights on and minimise load shedding.

But the City of Cape Town's Ian Neilson says municipalities can't adjust their tariffs now.

"The impact on the City of Cape Town would be R700 million a year if we were not able to pass that Eskom increase onto our customers."

Sibanye Gold's Peter Turner says as a mining company, they want investment capital for growth in South Africa, but this is based on reasonable electricity prices.

"Alternatively this will lead to diminishing operating performances, early closure of mines, job losses and reduced capital investment."

TARIFF HIKE WILL RESULT IN 60% MINE CLOSURES

The Chamber of Mines says the industry is at a tipping point and an electricity price increase will result in mine closures of up to 60 percent.

The Chamber of Mines' Monique Mathys says the mining industry is already vulnerable and an increase in electricity prices will result in job losses.

"We are already in a state of reducing; looking at mine closures, looking at putting on care and maintenance and we will shift from 30 percent closures to 60 percent closures."

Mathys says the gold industry could face up to 80 percent in closures and while Eskom is desperate to keep the lights on, it must find alternative funding.

Most presentations have focused on Eskom's failure to address the affordability of such a major price hike.

ESKOM CEO PLEADS WITH NERSA FOR 25,3% TARIFF HIKE

Earlier today, Eskom's acting CEO Brian Molefe pleaded with Nersa to approve the application for a tariff hike, saying it was essential to keep the lights on.

He explained that the tariff increase Eskom is seeking will include 9,5 percent, which will be used to run open-cycle gas turbines.

These diesel generators operate every day in order to minimise load shedding.

LISTEN: Eskom's meeting with Nersa.

If they are not used, South Africa would experience stage two load shedding every day from early in the morning until the evening.

Molefe said they needed to continue buying diesel, as this would cost much less than the impact of constant load shedding.

He added that Eskom's financial situation should stabilise from 2018 onwards, as more generating capacity is added to the grid and the utility can start paying back its debt.

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