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Joburg City Power welcomes Eskom tariff

Mar 01 2013 17:33 Sapa

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Johannesburg - Johannesburg City Power has welcomed the National Energy Regulator of SA's (Nersa) decision to limit an electricity tariff hike to eight percent a year over the next five years.

"The... increase determined by the regulator is generally good news to all and [is] supportive of the economy," City Power managing director Sicelo Xulu said in a statement on Friday.

"The lower increase also significantly reduces the pressure on revenue collection; the more affordable the price of electricity is kept for our broad customer base, the less severe this challenge becomes for City Power."

Eskom had initially applied for a 16% increase each year for the next five years.

Nersa chairperson Cecilia Khuzwayo told reporters on Thursday the new tariffs were "based on facts".

"The third multi-year price determination [MYPD3] will be eight percent over the next five years," she said.

The increase Eskom had sought would have more than doubled the current price, taking it from 61 cents a kilowatt hour in 2012/13, to 128 cents a kWh in 2017/18.

As a result of Nersa's decision, the price will increase from 65.51 cents a kWh in 2013/14 to 89.13 cents a kWh in 2018.

Xulu said the lower tariffs would also be welcomed in light of the proposed carbon tax in 2015.

"The economy certainly would not cope with a high Eskom increase coupled with such an additional tax," Xulu said.

Nersa's decision was welcomed by, among others, the Federation of Unions of SA (Fedusa), Agri SA, the Democratic Alliance, the Inkatha Freedom Party, Western Cape Finance MEC Alan Winde, and the Manufacturing Circle.

Eskom spokesperson Hilary Joffe said the parastatal would study the decision.

"We have noted the decision and it will present a challenge for Eskom," she said, adding that Eskom would try to keep the country's lights on.

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

Eskom later said in a statement the new tariffs would take effect on April 1 for Eskom customers, and on July 1 for municipal customers.

Nersa electricity sub-committee chairman Thembani Bukula said the eight percent increase was sufficient for Eskom to fulfil its obligations.

"Our function is not to run Eskom into the ground."

He said the decision on tariffs had been made independently of Eskom.

"No, we did not speak to Eskom. We tell them what the decision is," he said in response to a question.

Asked whether Eskom could appeal Nersa's decision, Bukula said legislation allowed for the parastatal to approach the high court if it was deemed necessary.

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