eishkom gunning for middle class

WEALTHY consumers and companies may face an electricity price increase of more than 34percent this year, Eskom spokesperson Fanie Zulu conceded yesterday - but he promised there would be no load-shedding this year.

WEALTHY consumers and companies may face an electricity price increase of more than 34percent this year, Eskom spokesperson Fanie Zulu conceded yesterday - but he promised there would be no load-shedding this year.

Zulu said he "can't guarantee" that higher income groups would not be asked to pay more than the 34percent hike Eskom was demanding to cover its operational costs, in the likely event that the increase was staggered to grant the poor relief.

"So the rich may pay more," he said after briefing Parliament's public enterprises portfolio committee.

"It happened last year when Nersa (National Energy Regulator of SA) said 14,5percent and then the affluent paid more," Zulu added, referring to the cap the national regulator put on price hikes for low income consumers after granting a tariff hike of 27percent.

Zulu said industry might also have to pay more.

He added however that the decision was not up to Eskom but to Nersa, which was considering the tariff increase application.

He stressed that it would be the last for this year.

The embattled power provider, which generated 95percent of the country's electricity, "would not" table another hike demand before March 2010. Eskom had demanded high tariff increases to fund a major infrastructure investment programme designed to eradicate a supply shortfall. Last year, it asked for 53percent but had to make do with roughly half that figure.

Director-general of Public Enterprises Portia Molefe warned this month that unless Nersa approved the tariff hike of just more than a third, the expansion programme would be at risk.

But Zulu confirmed that the 34percent hike would only cover state-owned company's operational costs and service the interest on its debt. It would not be used to build new plants to boost capacity, for which the company said it urgently needed to find an additional R27billion.

He said securing the price hike could help it to raise more funding though, as "it says to the financial community that you have enough revenue to service your debt".

A lack of capacity prompted highly disruptive load-shedding last year, but Zulu said he could assure electricity consumers that Eskom would not resort to such measures this year or next.

"There will be no load-shedding this winter, and there will be no load-shedding next winter."

He said this was partly because the economic recession had reduced demand, and because electricity saving habits had taken hold. - Sapa

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