Govt welcomes revised electricity tariff

Tuesday, December 1, 2009

Pretoria - The Department of Public Enterprises has welcomed Eskom's revised tariff application to the National Energy Regulator of South Africa (NERSA) of 35 percent over the next three years.

The department said the revised application took into account the economic impact of the proposed increase in electricity and the need to ensure that the impact on the poor, and small and medium enterprises, is mitigated.

The parastatal's acting Chairman Mpho Makwana announced on Tuesday that Eskom had revised its original 45 percent tariff application to 35 percent each year over a three year period.

"We are confident that NERSA, in making its final decision, will take all the proposals into consideration, including the country's future electricity supply requirements, and the need to ensure that Eskom is financially sustainable and operationally efficient," said the department in a statement.

It further said it supported the introduction of private sector participation/equity into Eskom's infrastructure investment programme

Business Unity South Africa (Busa) said that though it welcomed the lower tariff application, the modified request would still require to be critically interrogated.

"An excessive burden of Eskom's future funding should not be placed on higher tariffs, as it is clear from recent Reserve Bank statements that electricity costs are playing a major role in preventing inflation from falling faster, thus keeping interest rates higher than they otherwise might be," said Busa.

It further agreed that a new business model is needed for Eskom to promote competition as well as encourage alternative electricity suppliers in a restructured electricity market.
It will also be making submissions to the regulator shortly.

Meanwhile, the regulator's head of communication and stakeholder management Charles Hlebela told BuaNews that the regulator could extend the deadline for written submissions into the tariff.

Monday was the cut -off date for members of the public to make submissions.

"Nersa still needs to decide on whether to extend the deadline for written submissions which was yesterday [Monday]. Nersa might consider extending that date," said Hlebela.

He, however, added that it was unlikely the regulator would change the dates for the public hearings scheduled for 12 to 21 January 2010.

"The decision on the determination [of the tariff] is likely to remain on 24 February."