More power price hikes loom
South African power utility Eskom has applied to raise electricity rates by 14.6% per year over five years, a confidential document has showed.
Eskom said the increases could be as much as a yearly average increase of 19% over the same period, depending on certain government decisions.
Eskom needs to fund an expansion drive and the building of new power plants to keep the lights on in Africa’s largest economy.
Sharply rising power rates have added hugely to the costs of key sectors such as mining in the world’s biggest platinum producer.
One of the world’s lowest-cost electricity producers, Eskom, which provides 95% of the nation’s power, was granted three years of 25% power tariff hikes in 2010.
“In the base case, Eskom requests revenues totalling R1.07 trillion over the five-year period, which translates into annual average price increases of 14.6%,” Eskom chief executive Brian Dames said in the document marked “strictly confidential”.
But this could climb to 19% if the government brings in a carbon tax or builds new plants beyond those currently under construction, the document says.