SA warned to brace for more electricity price hikes

Nersa yesterday approved a 9.4 percent electricity tariff hike for the 2016/2017 financial year.

FILE: The 9.4 percent hike is just the first of many. Picture: Facebook.

JOHANNESBURG - South Africans have been warned to brace for more electricity price hikes in the future, but Eskom says it's still selling power at a low rate.

The National Energy Regulator of South Africa (Nersa) yesterday approved a 9.4 percent tariff hike for the 2016/2017 financial year; meaning the utility can recover R11.2 billion.

It's about half the amount asked for by the parastatal, which had spent billions on diesel to operate open cycle gas turbines in order to keep the lights on.

Several organisations have raised concerns about the tariff increase, which comes into effect next month, saying it will have a major impact on consumers and business.

However, the 9.4 percent hike is just the first of many.

Eskom's Khulu Phasiwe says prices will go up.

"Currently, we are also buying electricity form the independent power producers at about R2 per kilowatt hour and we are selling that electricity for 79 cents because that is the current price."

Meanwhile, the South African Chamber of Commerce and Industry says government should recapitalise Eskom to avoid inflation-inducing tariff increases.

LYNNE BROWN'S IDEAS TO HELP ESKOM

Meanwhile, Minister of Public Enterprises Lynne Brown says she has some ideas on how Eskom can access more funds in order to put the utility on track to financial sustainability.

Brown says Eskom needs resources for its five-year plan, especially since it can't rely completely on reimbursement via Nersa.

The minister says municipalities still owe Eskom money, but the utility will have to look at a financial sustainability plan.

"It cannot come from the fiscus, if it cannot come from the claw-back process, then it has to come from another source. I have a couple of ideas which I'd like to discuss with Eskom."

She says she cautiously welcomes the tariff hike because it gives Eskom certainty around what it can expect, but she wants a report from the utility on how this increase will impact on its build programme.