Eskom denied 25% tariff hike

Nersa has just announced it’s denied Eskom's application for a 25 percent tariff hike.

FILE: Acting Eskom CEO Brian Molefe briefed the country on the utility's winter plan on 17 June 2015.

JOHANNESBURG - The National Energy Regulator of South Africa (Nersa) has just announced it has denied Eskom' s application for a 25 percent tariff hike.

It announced the decision following a week of public hearing.

Nersa chairman Jacob Modise said, "The application did not provide the mechanism on how the proposed increase, if granted, will be implemented in the current financial year in a manner that is consistent with the requirement of the municipal financial act 2003."

Modise says Eskom can re-apply or just add the information it excluded from the last application.

But Nersa says if it succeeds a second time, it would only affect the changes in the 2016/2017 financial year.

This means, while Eskom will be given the already approved 12 percent, it will not be granted a further hike.

Eskom argued it needed more funds to buy diesel in order to minimise load shedding and prevent further damage to the economy.

Last week, organisations and businesses made their presentations to Nersa about Eskom's proposed 25 percent tariff hike.

On Wednesday Eskom's Acting CEO Brian Molefe vowed to do whatever it takes not to harm South Africa's economy, whether or not they receive a tariff increase.

Molefe was giving his closing remarks at the end of two days of public hearings into Eskom's 25 percent electricity price hike.

He argued they won't be pursuing a 2,5 percent environmental levy so what they're looking for is about 9,5 percent for the 2015/16 financial year to keep the lights on.

The acting CEO reiterated that load shedding costs six times more than what they were asking for to run the open cycle gas turbines which require diesel.

Businesses, the mining sector and municipalities have been adamant South Africans cannot afford another electricity price hike and warn that if it goes ahead, industries will collapse and jobs will be lost.