electricity price to double

BAD NEWS: Nersa chairperson Cecelia Khuzwayo and the Electricity Committee boss Thembani Bakula at a media briefing in Pretoria on
electricity tariff hikes yesterday. Pic: PEGGY NKOMO. 24/02/2010. © Sowetan
BAD NEWS: Nersa chairperson Cecelia Khuzwayo and the Electricity Committee boss Thembani Bakula at a media briefing in Pretoria on electricity tariff hikes yesterday. Pic: PEGGY NKOMO. 24/02/2010. © Sowetan

THE Energy Regulator of South Africa has allowed power utility Eskom to increase electricity tariffs by 24,8percent effective on April 1.

THE Energy Regulator of South Africa has allowed power utility Eskom to increase electricity tariffs by 24,8percent effective on April 1.

Eskom will add another 25,8percent increase in April 2011 and a further 25,9percent in the same month in 2012.

Eskom had asked for a 35percent price increase in each of the next three years to help raise funds for a R385billion power expansion programme.

The hikes will boost Eskom's revenue by R85billion in its next financial year, an additional R109billion in 2012 and R141billion in 2013.

Last year Eskom increased their tariff by 31percent.

Making the announcement in Pretoria yesterday, Nersa chairperson Cecelia Khuzwayo said in considering Eskom's application, all due processes were followed, including public comments and internal electricity sub-committee meetings.

Khuzwayo said 80 oral comments and 427 written stakeholder comments were received during the public hearings.

Eskom has until March 1 to submit proposals for the structuring of retail tariffs of other customer classes. Nersa would make a decision on these before March 15.

Khuzwayo said those municipal distributors that implemented a 34percent increase in the 2009-10 financial year would have to implement a municipal guideline increase of 15,33percent from July 1, of 16,03percent from July 1 2011, and 16,16percent from July 1 2012.

Nersa would consider applications case-by-case where municipal distributors had implemented a different increase.

Khuzwayo said in studying Eskom, Nersa took into consideration its cash-flow, primary energy issues, operating expenditure and asset base, and the impact on the poor.

"Research has revealed that South Africa is the second most electricity-intensified country in the world after China.

"Our economy is highly depended on electricity. In the past when electrification was intensive, our economy did very well with the GDP averaging 5percent and creating about 2million jobs."

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