31.3% Eskom price increase
Falling less than 3% short of Eskom’s requested hike, the new tariff granted by Nersa follows last year’s rejection of Eskom’s request to hike tariffs by 60%.
The regulator last year approved an increase of 13.3% over and above a 14.2% approved earlier. This resulted in a 27.5% average increase year on year.
At the time Nersa indicated that it would limit the increases in electricity prices to between 20% and 25% a year over the next three years. The new tariffs will come into effect next week, the beginning of July.
Growth consultant Frost & Sullivan’s energy industry manager Cornelis van der Waal said the decision was “very much in line” with what it had expected.
“The increase will be hard on consumers in the medium term, but we maintain that a long-term view needs to be taken on this issue,” Van der Waal warned. But he said these decisions had to be taken in the interests of the country’s economic development, the sustainability of industry and ensuring a reliable supply of electricity.
“Hiking tariffs now is the best way to support these long-term goals,” he said. Citing Nersa chairman Collin Matjila, Sapa said the tariff increase would result in a rise in the average standard tariff from 25.24 cents per kilowatt-hour (kWh) to 33.14 cents.
Nersa said the adjustment would result in estimated tariff revenues of R62.031 billion from distribution standard tariff sales of 198 857 gigawatt-hours (GWh).
The estimated total revenues, including special pricing agreements, would be R64.7 billion for total sales of 222 640GWh, including international sales.
Nersa said the 31.3% percent increase included the 2 cents/kWh levy on the sale of electricity generated from non-renewable sources (environmental levy).
Eskom price increase – give your views
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