Eskom hearings move to Joburg

Thursday, January 21, 2010

Pretoria - Hearings into Eskom's proposed 35 percent tariff increase in electricity prices are to take place in Johannesburg today, with the public and business voicing their concerns.

The National Energy Regulator of South Africa (Nersa) will hold public hearings into the parastatal's request at Gallagher Estate. Acting Eskom CEO Mpho Makwana is expected to open the hearings this morning.

The hearings in Johannesburg have been extended by a day to include all those who wanted to make submissions.

The hearings will wrap up on Friday after having taken place in various provinces.

The power utility late last year revised its initial 45 percent tariff hike application to the regulator.

Eskom said the application was made to ensure power supply and to raise funds for its R385 billion power expansion programme.

During Wednesday's Nersa hearing in Cape Town, Alderman Ian Neilson, the City of Cape Town's Executive Deputy Mayor and Mayoral Committee Member for Finance, raised various concerns.

These related to rate of Eskom's infrastructure investment, the effect of Eskom's cross-subsidisation of its tariffs, the impact of artificially suppressing tariffs and the impact of the NERSA process on municipal tariffs.

Neilson warned against an abnormally high infrastructure investment to increase generation capacity at Eskom, to the detriment of investment in other services or infrastructure and in other spheres of government.

He said that if investment in infrastructure was not balanced across all services, the shift of funding away from investment in other services would cause these services to hinder future economic growth.

In addition to this concern, Neilson said that the middle-income consumer is being hard hit by tariff increases and must carry the burden of Eskom providing lower rates for key industries and indigent people.

Neilson noted that it is important to provide indigent people with affordable electricity, but said that this cannot be to the detriment of middle-income consumers.