All data is delayed
See More

Eskom's electricity hikes may come down

Dec 03 2012 16:46

Environmental groups have welcomed National Environmental Compliance and Enforcement Report that revealed Eskom's environmental mismanagement. (Duncan Alfreds, News24)

Related Articles

Eskom's 16% hike necessary, says Gigaba

Eskom price hikes unavoidable - Gigaba

Eskom posts massive profits

EIUG: Electricity increases prohibitive

Greedy Eskom taints SA's greatness

Ditching Eskom


Johannesburg - Eskom's requested electricity tariff could be lowered to about 10.8% and still be cost-reflective, Business Unity SA (Busa) said on Monday.

"If more detailed information had been provided it might have been possible to find further savings," Busa said in a statement.

"According to research commissioned by Busa, an accelerative price path, at a lower rate, can be achieved without negatively impacting on supply security.

"These electricity price shocks now have significant adverse economy-wide impacts."

Eskom applied to the National Energy Regulator of SA (Nersa) in October for a 16% increase in electricity prices each year for the next five years.

This would take the price of electricity from 61 cents a kilowatt hour in 2012/13 to 128c a kWh in 2017/18 - more than doubling it.

Busa said the Nersa consultative process was as essential in making the right decisions about future electricity tariffs.

"A number of key sectors in the SA economy, such as mining, minerals, and chemicals are heavily reliant on electricity as an input into their production processes," the organisation said.

"These sectors often are highly trade-exposed and would seem to have limited ability to absorb the substantial increases in real electricity tariffs."

The proposed electricity tariff increase would impact on the output of these sectors, employment and investment decisions, and would have a ripple effect throughout the economy.

Other less electricity-intensive sectors would also be adversely impacted.

"Therefore, the Busa analysis suggests that the tariff increases contained in Eskom's MYPD3 [Multi-Year Price Determination 3] application will have significant negative long-term implications for households, industries, and the economy at large."

This made Nersa's interrogation of the MYPD3 cost estimates all the more crucial, said Busa.

Significant savings were available if a detailed cost assessment of Eskom's MYPD3 application was done.

Busa made this submission to Nersa last week. The research was done by Genesis Analysis, including inputs from Busa members.

The current Multi-Year Price Determination, MYPD2, ends on March 31, 2013. New tariffs will be implemented from April 2013.

Nersa will announce its final decision in February, following an extended period of consultation and public hearings.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

nersa  |  busa  |  eskom  |  electricity tariffs



Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about...


So, the worst has finally happened. S&P and Fitch officially downgraded SA to junk status following the ill-timed Cabinet reshuffle.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Do you have a budget set aside for Easter holiday spending?

Previous results · Suggest a vote