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Power utility Eskom said on Monday it has applied for a 16% annual increase in electricity rates over five years to pay for new plants and buy power from independent producers.

The state-owned utility said the increases, from April 2013 to March 2018, would include a 13% annual hike for its own needs and a 3% rise to support the introduction of independent power producers.

Eskom’s Chief Executive Brian Dames said the utility would spend 337 billion rand ($39 billion) on capital expenditure over the next five years and would need 78 billion rand over the same period to buy power from independent producers.

Eskom is currently building three new plants — Medupi, Kusile and Ingula — with the first power from them at least a year away.

“We have not included any new build expansion beyond Kusile in our tariff application,” Dames said at a media briefing ahead of the announcement.

The Kusile plant is expected to be commissioned in 2018/19.

Eskom has been struggling to raise the money it needs to build power plants fast enough to avoid a repeat of a 2008 crisis that forced mines to shut for days and cost Africa’s biggest economy billions of dollars in lost output.

Energy-intensive users, including the vital mining industry, have long said that the steep increases were making some of their operations unsustainable. Unions have also protested over the impact of above-inflation hikes on everyday South Africans.

Eskom, once one of the world’s lowest-cost electricity producers, has been granted annual increases of 25% in recent years.

Earlier this year President Jacob Zuma asked Eskom to seek options to limit the increases to protect economic growth and the last 25% hike was cut to 16%.

The increases could put additional pressure on consumers, already battling with the fallout of the global economic woes, and mining houses that are battling to contain labour unrest that has brought some of their operations to a standstill.

Comments

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Fri May 24 18:18:35 SAST 2013 ::

Oct 22, 2012

Keafixa

knowing the redundancy of that two headed president he will agree.......mxm
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Oct 22, 2012

RobinHH

AGAIN!!~??
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Oct 22, 2012

MommaC

Wouldn't be an issue if the dumbasses hadn't sold off 5 perfectly good power plants as scrap metal!

We need a situation where Eiskom is not a monopoly. Give them some competition and us a break
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Oct 22, 2012

oldlady12

No wonder workers are striking for 20% or more increases. With all the basic things around them going up at this kind of rate, and average increases being in the region of 5.5% ordinary people "bo.er agteruit."
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Oct 22, 2012

Chichi7

not again!!
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Oct 22, 2012

CheeseBoy

are these not the same b@stards who splurged and spent 34 million on parties? we are still experiencing power outages as a result of these fools

this is truely unbelievable.
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Oct 22, 2012

FarCeSpotter

MMMM

Guys we are heading for stormy waters. Our country's people are already over indebted. Pravin is in dire straights.

Eish Eskom - I see another e-toll fiasco.
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Oct 22, 2012

FarCeSpotter

I cannot see that we will be able to afford this price hike and the resulting inflationary effect.


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Oct 22, 2012

FarCeSpotter

What I am also wondering is why does the government not invest in a solar panel manufacturing plant and the related products. That way we can harvest our abundant good conditions.

Instead they want us to keep on paying for po_wer (in other words it is becoming a sort of t@x)

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Oct 22, 2012

BraSipho

We are not the private bank to ESKOM.
They pay huuuuge bonusses to themselves.

Bunch of idiots who do not know the first thing about electricity supplei. Fire them all.
Next election is not far away. I will remember all this.
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