Eskom price hike may be dead in the water – for now

Eskom’s request to hike prices may be denied and deferred to next year, thanks to a Treasury directive issued last month.

This is according to a report by the Sunday Times, citing information that came to light during presentations at the public hearings at Nersa this week.

The directive from Treasury states that further increases in tariffs this year were out of the question as municipalities have not made provisions for them in their budgets.

Acting Eskom CEO, Brian Molefe, had not been aware of the directive, the paper said.

There are loopholes to get around the directive, however there has been little support from the public, business and even political players to approve the price hike.

Eskom is currently seeking an additional 9.58% tariff increase, which would push the total increase for the year to 24.78%.

At the same hearings, energy expert Chris Yelland told the panel that the price increase was worse than it seemed and would actually total 31.61%.

“The question of affordability to the economy and to electricity customers has not been considered by Eskom at all,” he said.

Molefe told the panel that the price increases were necessary as load shedding was expensive. He also noted that the two options were for consumers and businesses to pay up, or to face more blackouts.

He insisted that worse load shedding was six times more damaging to the economy than the tariff increase the utility was seeking.

You can read the full report in the Sunday Times for 28 June 2015.

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Eskom price hike may be dead in the water – for now