Eskom says 8% tariff hike presents difficulties

An electricity tariff hike of 8% over the next five years will present difficulties, Eskom has said.

“We will be studying the decision in detail to understand its consequences and impact for Eskom,” spokesperson Hillary Joffe said today.

“We have noted the decision and it will present a challenge for Eskom.”

However, Eskom would endeavour to keep the country’s lights on.

“We will now be looking at how we can meet this challenge,” she said.

Eskom had applied for a 16% increase in electricity prices in each of the next five years. This would have more than doubled the current price, taking it from 61c a kilowatt hour in 2012/13 to 128c a kWh in 2017/18.

The National Energy Regulator of SA (Nersa) said that its decision was based on facts and that a detailed analysis had been done.

The Federation of Unions of SA (Fedusa) was pleased with the lower tariff.

“We welcome the 8% increase … Although the increase will still be felt by working people, we feel that this is much better than the 16% requested by Eskom,” said Fedusa general secretary Dennis George.

He said the decreased rate would affect inflation.

George said the 8% was exactly half of Eskom’s bid and this meant electricity, which cost 65c per kilowatt hour in 2013, would cost 89c a kilowatt hour by 2018.

Western Cape Finance MEC Alan Winde welcomed Nersa’s decision.

“While we understand that the country is experiencing a shortage of energy … Eskom needs to look at innovative ways of producing electricity, such as renewable energy,” he said.

He said renewable energy was one of the biggest investment opportunities in the Western Cape.

“We expect that between 40% and 50% of wind power projects in South Africa, and 15% of solar energy projects will be set up in the Western Cape by 2014 to provide for about 10% of our region’s energy needs.”

Winde said the tariff hike would have the greatest affect on the already “overburdened” consumer and entrepreneurs operating in the small, medium and micro enterprise sector.

Meanwhile, a power cut nearly disrupted Nersa’s announcement about electricity tariff hikes.

The first jokes surfaced just seconds after darkness descended on the reporters assembled for the announcement.

“Was this a veiled warning to Nersa?” asked a reporter.

Another piped up: “Give us our increase … or else.”

Eskom had asked Nersa for a 16% electricity price hike over the next five years.

Officials wore sheepish grins during the 10-minute wait for power to be restored at the Nersa building in Madiba Street, Arcadia, Pretoria.

- Sapa