Johannesburg - Power utility Eskom said on Monday it has
applied for a 16% annual increase in electricity rates over five years to pay
for new plants and buy power from independent producers.
The state-owned utility said the increases, from April 2013
to March 2018, would include a 13% annual hike for its own needs and a 3% rise
to support the introduction of independent power producers.
Eskom's Chief Executive Brian Dames said the utility would
spend R337bn on capital expenditure over the next five years and would need
R78bn over the same period to buy power from independent producers.
Eskom is currently building three new plants - Medupi,
Kusile and Ingula - with the first power from them at least a year away.
"We have not included any new build expansion beyond
Kusile in our tariff application," Dames said at a media briefing ahead of
the announcement. The Kusile plant is expected to be commissioned in 2018/19.
Eskom has been struggling to raise the money it needs to
build power plants fast enough to avoid a repeat of a 2008 crisis that forced
mines to shut for days and cost Africa's biggest economy billions of dollars in
lost output.
Energy-intensive users, including the vital mining industry,
have long said that the steep increases were making some of their operations
unsustainable. Unions have also protested over the impact of above-inflation
hikes on everyday South Africans.
Eskom, once one of the world's lowest-cost electricity
producers, has been granted annual increases of 25% in recent years.
Earlier this year President Jacob Zuma asked Eskom to seek
options to limit the increases to protect economic growth and the last 25% hike
was cut to 16%.
The increases could put additional pressure on consumers,
already battling with the fallout of the global economic woes, and mining
houses that are battling to contain labour unrest that has brought some of
their operations to a standstill.
The rand and government bonds showed little immediate
reaction to the news.