More electricity tariff increases in pipeline

THE bad news on future electricity pricing just keeps on coming, with Eskom chairperson Bobby Godsell the latest to sound the alarm.

THE bad news on future electricity pricing just keeps on coming, with Eskom chairperson Bobby Godsell the latest to sound the alarm.

Briefing Parliament's portfolio committee on public enterprises yesterday, he said electricity tariffs could triple.

He said after last year's blackouts Eskom had focussed on just keeping the lights on, buying 44million tonnes of coal to boost reserves, hiring 2000 additional staff, cranking up emergency diesel-fired stations to cope with peak demand and running the existing power stations to their limits.

Now the focus would be on building capacity and cutting operating costs.

Godsell said Eskom's board had adopted a programme to cut operating, fuel and capital expenses for this year by R22billion on a turnover of about R100billion.

"For the company to maintain its mandate to both stimulate growth and social development, for the company to return to financial health, Eskom needs to fully recover its operating costs and the cost of primary energy. This indicates the need for a very significant increase in the tariffs," he said.

Godsell said the wholesale price of power would have to increase from the current three US cents a kilowatt hour to around the OECD standard of eight or nine cents a unit.

He called for a national debate on how quickly Eskom's tariffs should be boosted to fully cover its costs. - Brendan Boyle

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