Eskom price hike will jeopardise food security

The proposed Eskom tariff hike of about 17% will hit the agricultural industry hard, the National Energy Regulator of South Africa heard on Tuesday.

By - January 19, 2016 Share on LinkedIn
Eskom blue logo

The proposed Eskom tariff hike of about 17% will hit the agricultural industry hard, the National Energy Regulator of South Africa (Nersa) heard on Tuesday.

“We cannot accept the amount that is on the table, we cannot absorb it!” Agri Western Cape CEO Carl Opperman told the Nersa board emphatically.

Opperman said food security in South Africa would be in severe jeopardy should the tariff hike be granted.

He was addressing a Nersa panel which is considering input from the public on Eskom’s application for a R22.8bn adjustment for its 2013/2014 financial year. Should the adjustment be granted, it is expected to lead to a 17% electricity tariff increase.

The regulatory clearing account (RCA) application by Eskom is for cost recovery and revenue adjustments based on actual past variances and not a revenue application based on future estimates.

“The R255m cost of electricity for the entire industry would increase dramatically,” Opperman said. “We cannot support the RCA … there are too many unanswered questions.”

He said the industry would consider an “inflation rate” increase.

Opperman highlighted the importance of the cold chain in the agricultural sector, whereby produce needs to be kept at specific temperatures at various stages in the production process.

This process relies on electricity and is also susceptible to interruption during load shedding.

Opperman said load shedding had led to a 40% decline in the quality of maize crops, while the price for power remained unchanged.

Nersa is expected to make its decision by February 26 2016.

Fin24

More on Eskom

Eskom must cut own costs before demanding price increase

Share your thoughts

Join the conversation

Connect with Us

androidappletwitterfacebookgoogleplusfeednewsletter

Poll

Do you have a new Smart ID card?

View Results

Loading ... Loading ...

More News

Rand dips below R14 to the US dollar

South African Rand Money Coin

The rand has dipped below R14 to the US dollar for the first time since November 2015.

Awesome tech specials and gadget deals

Sale Deals

This weekend you can save money on a wide range of gadgets from Makro, Incredible Connection, Game, and Dion Wired.

Schoolboy invents “cellphone” that doesn’t use airtime

Spectrum signal tower

A Grade 12 learner in Namibia’s Ohagwena Region has invented a sim-less mobile phone that does not require airtime to make calls.

FSB investigating JSE’s R98-billion mistake

JSE stocks growth

The Financial Services Board said on Friday it is looking into a programming error that caused the JSE to miscalculate inflows into SA equities by R98bn.

Free MyBroadband Newsletter
×