'Eskom tariff hike will severely affect SA'

Nersa has heard how the proposed hike will affect business, the mining sector and citizens.

Eskom's Megawatt Park in Johannesburg. Picture: Reinart Toerien/EWN.

JOHANNESBURG - The National Energy Regulator of South Africa (Nersa) has heard how an electricity tariff hike will have a severe impact on business, the mining sector and the individual.

On the last day of public hearings, a number of organisations presented arguments strongly opposing Eskom's application for a 16,6 percent tariff hike for this year.

The utility says it needs to recover R22.8 billion, some of which was spent on buying diesel to operate open cycle gas turbines to avoid load shedding.

The Chamber of Mines has warned about the possibility of 40,000 job losses if Eskom's application is approved.

Sibanye Gold's Peter Turner says it's difficult to plan ahead without reliable and affordable electricity.

"The last thing an investor wants is surprises. We are seeing disinvestment, we're seeing the economic turmoil and at the heart of that, I think Eskom has a huge role to play."

Energy advisor Ted Blom has also criticised Eskom's lack of maintenance on the grid.

Many organisations have also questioned Eskom's use of the open cycle gas turbines, saying diesel costs are too high and if this continues the utility may want to clawback again in the future.

Business Unity South Africa has raised concerns about the tariff hike. It says companies have already bared the brunt of increases and planning for the future becomes a futile exercise.

Business Unity South Africa's Martin Kingston says businesses need to know Eskom's plan going forward in terms of supply.

Kingston says there are a number of other factors affecting business at the moment including the economic climate.