Busa warns of catastrophic consequences if Eskom tariff hike approved

Business Unity South Africa has called on the National Energy Regulator to only approve inflation-linked tariff increases until the electricity supply industry in the country has been restructured.

The Nersa panel listens to hearings on Eskom's proposed tariff increase. Picture: @NERSA_ZA/Twitter

JOHANNESBURG - Eskom’s hopes of securing a suitable tariff hike continues to face stubborn resistance.

Business Unity South Africa has called on the National Energy Regulator to only approve inflation-linked tariff increases until the electricity supply industry in the country has been restructured.

On Monday, Nersa resumed hearings, this time in Midrand near Johannesburg, into the power utility's electricity price hike proposal of 15% for the next three years.

Business Unity South Africa's Martin Kingston has warned of catastrophic consequences for South Africa's economy if Eskom’s proposed tariff increase is approved.

“We, as boosters of the economy, believe that we’ll not be able to tolerate tariff increases in excessive inflation [but] that doesn’t mean that we’re proposing that there should be at an inflationary level.”

Kingston says the methodology for setting electricity tariffs should be suspended.

“[It should be suspended] until the restructuring of the electricity industry is complete.”

Energy experts have described Eskom’s application as short-sighted and reckless, saying the power utility is no longer serving the interests of the South African economy.

(Edited by Shimoney Regter)