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Eskom makes do with 2.2% tariff increase – Singh

Jun 14 2017 14:15
Liesl Peyper

Cape Town – Eskom CFO Anoj Singh estimates it will take around seven years for the power utility to reach financial stability, depending on the tariff increases it will be granted and cost-saving initiatives at the state-owned entity.

“The 19.9% tariff application that Eskom is submitting for the 2018/19 financial year is part of that journey towards financial sustainability,” Singh said during a briefing at Parliament on Wednesday.

The power utility gave feedback to MPs who are members of the select committee on public enterprises on its tariff increase for the 2017/18 financial year and the amended pricing structure at municipal level that will come into effect on 1 July 2017.

During question time, the Democratic Alliance’s (DA) Jacques Julius asked Eskom to provide reasons for its application for a 19.9% tariff increase from 1 April 2018 which will be for the 2018/19 financial year.

The current multi-year price determination which lasts for a five-year period comes to an end on 31 March 2018 and the power utility needs to submit its application for the next period. 

Julius also took issue with the fact that Eskom consistently asks for higher tariff increases that are granted by energy regulator Nersa.

Singh hit back, saying at no point has Eskom portrayed that it only asked for a 2.2% tariff increase (the hike that Nersa granted for the 2017/18 financial year).

“Nersa grants us 2.2% and we live with what we have. We don’t ask for additional government guarantees or equity injections and we haven’t threatened the country with load shedding,” Singh said.

Earlier in the briefing, Eskom senior manager for electricity pricing Deon Conradie said Eskom’s own operations have seen a 1.1% increase for approximately 45 000MW of generating capacity.

“Meanwhile, the costs of the independent power producers (IPP) programme increased with 1% of the 2.2% tariff increase granted,” Conradie said.

 

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