Eskom not ‘bluffing’ on its need for diesel

Eskom says it will now have to look for alternative ways to buy diesel and keep the lights on.

FILE: Consumers will now be paying 12,69 percent more for electricity half the amount that Eskom wanted. Picture: Reinart Toerien/EWN.

JOHANNESBURG - Eskom says it's neither "bluffing" nor "blackmailing" the public when it warns it cannot afford to buy more diesel to keep the lights on without a 25 percent tariff increase.

The National Energy Regulator of South Africa (Nersa) turned down the utility's latest application due to insufficient information and a lack of transparency on Eskom's finances.

Consumers will now be paying 12,69 percent more for electricity which is half the amount that Eskom wanted.

Eskom's Khulu Phasiwe says despite the bleak picture created by Nersa turning down its application for more funds, the utility will do its best to keep load shedding to a minimal.

"We do have the budget for diesel but it's not enough to carry us through for the entire year."

Phasiwe says the parastatal will now have to look for alternative ways to obtain the money to buy diesel.

"Our plan is not to blackmail the country or have load shedding in the first place, so we will have to sit down with the shareholders and see as to how we can take this thing forward."

Eskom says it hopes the R23 billion President Jacob Zuma promised during his State of the Nation Address will be sufficient to help steer the parastatal through this crisis.

WATCH: Eskom disappointed by Nersa dismissal

Nersa announced it's decision to deny Eskom its increase following a week of public hearings.

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

But Nersa said 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.

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.