Eskom seeks series of 16% tariff hikes

Eskom has submitted an application to Nersa, the South African energy regulator

Eskom seeks series of 16% tariff hikes
Arnot Power Station

Eskom has submitted an application to Nersa, the South African energy regulator,  for a 16% increase in electricity tariffs for each of five years starting April 2013 to end March 2018.

If granted, the increase will mean the price of electricity will be and rise from 61 cents per kilowatt hour (c/kWh)  in 2012/13 to 128 c/kWh in 2017/18. Eskom assumes  a 1.9% compound annual growth in electricity demand or 2.5% in GDP growth over the proposed five years.

Built in is the cost of supporting the South African government’s programme to have some 4,745 Megawatts (MW) of electricity supplied by independent power producers (IPPs) which comprises 3% of the 16% tariff increase application.

Eskom also said that renegotiation of a controversial contract to supply electricity to Australian mining group BHP Billiton at below cost would be referred to Nersa, which had powers to intervene in the matter.

“We will approach the regulator to review the power contract,” said Dames at a press briefing. “We think the action is now prudent.” 

Eskom would continue to negotiate with BHP Billiton.

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