THE National Energy Regulator of South Africa (Nersa) on Thursday (28/02/2013) granted power utility Eskom an 8% average increase per annum over the next five years.
Eskom applied for a 16% per annum increase for five years‚ which was opposed by business‚ trade unions and civil society groups at hearings across the country.
Cecilia Khuzwayo‚ chairwoman of the energy regulator‚ said Eskom’s request had come amid a continuing global economic slowdown.
Nersa heard 162 oral submissions in nine provinces from a broad range of interested parties on Eskom’s application.
South Africa’s electricity prices had rocketed by more than 170% over the past five years‚ while administered prices in other Brics (Brazil‚ Russia‚ India‚ China‚ South Africa) countries had decreased by more than 36% in the past decade.
The price increases in South Africa contributed to the closure of 440‚000 small businesses in the five years to 2011.
Eskom said the lower increase could present it with difficulties.
"We will be studying the decision in detail to understand its consequences and impact for Eskom,” spokeswoman Hilary Joffe said.
"We have noted the decision and it will present a challenge for Eskom.” However, Eskom would endeavour to keep the country’s lights on.
"We will now be looking at how we can meet this challenge.” Eskom had applied for a 16 percent increase in electricity prices in each of the next five years.
This was more than double the current price, taking it from 61 cents a kilowatt hour in 2012/13, to 128 cents a kWh in 2017/18.
The National Energy Regulator of SA said its decision was based on facts, adding that a detailed analysis had been done.
The Federation of Unions of SA was pleased with the lower tariff rate.
"We welcome the eight percent increase.... Although the increase will still be felt by working people, we feel that this is much better than the 16 percent requested by Eskom,” said Fedusa general secretary Dennis George.
He said the decreased rate will impact on inflation.
George said the eight percent was exactly half of Eskom’s bid and this meant electricity, which cost 65c per kilowatt hour in 2013, would cost 89c per kilowatt hour by 2018. - Sapa, © BDlive 2013
