The National Energy Regulator of SA (Nersa) has awarded Eskom electricity tariff increases over the next three financial years that fall way short of what it says it needs to be financially stability.
The increases will be 9.41% for 2019-2020, 8.1% for 2020- 2021 and 5.22% for 2021-2022, Nersa chair Jacob Modise said on Thursday. This amounted to allowable revenue in each period of R206.38bn, R221.843bn and R233.078bn.
With a previously approved increase of 4.4%, which comes into effect in April, the hike will effectively be 13.81% in 2019.
The troubled power utility originally applied for a tariff increase of 15% annually over the next three years, but in early February it amended the application, and asked for a 17.1% hike in 2019; 15.4% in 2020; and 17.5% in 2021.
Electricity sales continue to decline and the power utility’s income is not enough to cover the cost of servicing its massive R420bn debt burden.
Modise said the regulator will launch a number of initiatives, including its own investigation into governance failures at Eskom and may adjust its decision based on the outcome of this probe or those undertaken by other entities. “Our challenge has been and still remains regulating the energy industry in a manner that balances the interests of energy producers on one hand and those of customers on the other,” he said.
“This is never an easy task, for, inevitably, it is influenced by the greater economic environment, both locally and internationally, and as directed by the policy environment of the government.”
Eskom is struggling to keep the lights on. On some days, the utility is burning R100m worth of diesel in open-cycle gas turbines as an emergency measure to avoid implementing scheduled power cuts.
Economists warn Eskom’s requested tariff hike will have an adverse impact on the economy, and SA business called on the regulator to grant an inflation-linked tariff hike to balance the needs of consumers with Eskom’s requirements.
The Reserve Bank expects headline inflation to reach 4.8% in 2019 5.3% in 2020 and 4.8% in 2021. A sustainability task team and a technical review team have been appointed, and President Cyril Ramaphosa announced the unbundling of Eskom’s three business units in his state of the nation address in early February.
In the 2019 budget, R69bn was allocated for the utility over the next three years.
Public enterprises has highlighted the need for Eskom to collect the R28bn owed by municipalities.
Electricity price set to rise 13.8%
Image: File
The National Energy Regulator of SA (Nersa) has awarded Eskom electricity tariff increases over the next three financial years that fall way short of what it says it needs to be financially stability.
The increases will be 9.41% for 2019-2020, 8.1% for 2020- 2021 and 5.22% for 2021-2022, Nersa chair Jacob Modise said on Thursday. This amounted to allowable revenue in each period of R206.38bn, R221.843bn and R233.078bn.
With a previously approved increase of 4.4%, which comes into effect in April, the hike will effectively be 13.81% in 2019.
The troubled power utility originally applied for a tariff increase of 15% annually over the next three years, but in early February it amended the application, and asked for a 17.1% hike in 2019; 15.4% in 2020; and 17.5% in 2021.
Electricity sales continue to decline and the power utility’s income is not enough to cover the cost of servicing its massive R420bn debt burden.
Modise said the regulator will launch a number of initiatives, including its own investigation into governance failures at Eskom and may adjust its decision based on the outcome of this probe or those undertaken by other entities. “Our challenge has been and still remains regulating the energy industry in a manner that balances the interests of energy producers on one hand and those of customers on the other,” he said.
“This is never an easy task, for, inevitably, it is influenced by the greater economic environment, both locally and internationally, and as directed by the policy environment of the government.”
Eskom is struggling to keep the lights on. On some days, the utility is burning R100m worth of diesel in open-cycle gas turbines as an emergency measure to avoid implementing scheduled power cuts.
Economists warn Eskom’s requested tariff hike will have an adverse impact on the economy, and SA business called on the regulator to grant an inflation-linked tariff hike to balance the needs of consumers with Eskom’s requirements.
The Reserve Bank expects headline inflation to reach 4.8% in 2019 5.3% in 2020 and 4.8% in 2021. A sustainability task team and a technical review team have been appointed, and President Cyril Ramaphosa announced the unbundling of Eskom’s three business units in his state of the nation address in early February.
In the 2019 budget, R69bn was allocated for the utility over the next three years.
Public enterprises has highlighted the need for Eskom to collect the R28bn owed by municipalities.
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