Applause for Nersa’s no to 19.9% | Fin24
 
  • Mpumalanga Mine

    Constitutional Court rejects coal mining company’s attempt to appeal – but the saga isn’t over.

  • Audit Outcomes

    Turnaround plans had virtually no impact for ailing parastatals, the Auditor-General has found.

  • Battery Power

    Gordhan: Government intends to sign off soon on a "world class" battery storage project.

Loading...

Applause for Nersa’s no to 19.9%

Dec 17 2017 06:00
Lesetja Malope

Johannesburg - The National Energy Regulator of SA (Nersa) has received widespread applause for rejecting Eskom’s 19.9% tariff hike application and instead approving only 5.23%.

Announcing Nersa’s decision on Friday, to approve revenue of R190.34 billion for Eskom, the regulator’s chairperson, Jacob Modise, said the decision was based on the available information and an analysis of the power utility’s allowable revenue.

Nersa manager for electricity Mbulelo Ncetezo said they opted for a one-year agreement.

Xolani Mbanga, CEO of the Energy Intensive Users Group of Southern Africa, said the organisation welcomed the announcement and was glad Nersa rejected Eskom’s 19.9% application. It was considered far too high.

The group represents major industrial users that together consume up to 40% of the country’s power.

According to Neva Makgetla, senior economist at Trade and Industrial Policy Strategies, the 5.23% hike seemed to be the best Nersa could offer, because Eskom had much work to do.

Makgetla said the growth in demand for electricity had been lower than the growth in South Africa’s GDP. Despite this, Eskom said in its application that there was evidence of growing demand for electricity.

She pointed out that the high price of electricity was not the sole reason for less demand for power from Eskom.

The Chamber of Mines’ chief economist, Henk Langenhoven, said that without the finalisation of the Integrated Resources Plan to ensure an economically viable energy supply for the country, Eskom would continue to be in danger of failing.

“While we welcome Nersa’s decision to limit the increase to an estimated allowable revenue of about R190 billion, rather than the R220 billion requested by Eskom, electricity costs continue to be the fastest-growing component of the mining sector’s cost base, having increased by more than 300% over the past eight years,” he said.

Eskom spokesperson Khulu Phasiwe said the utility would only offer detailed comment after receiving Nersa’s reasons.

nersa  |  eskom  |  electricity costs  |  tariff hikes
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com 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
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

Money Clinic

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

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote

Loading...