HomeRegional NewsSouthern Africa14% tariff increase possible

14% tariff increase possible

26 October 2007 – South Africa’s electricity price may increase by 14%, despite a request for an 18% increase from Eskom.

In a report on Eskom’s application for multiyear price determination (MYPD) rule changes, the National Energy Regulator of South Africa (Nersa) said "The general acceptance is that prices have to increase to the level required to cover Eskom’s expenditure and an adequate return on invested capital, however, that does not take away the objective of the consistency of the price increase."

Nersa stated that a 14.2% increase would make it feel "much more comfortable" than the 18% proposed by Eskom. The current MYPD agreement allows Eskom a 6.2% increase in 2008/09.

Eskom approached Nersa for a price increase earlier this year, as higher tariffs were required to help fund the capital expenditure programme that Eskom has embarked on. Eskom confirmed that dividends have not been paid to its shareholder for the last two years, nor was it likely that dividends would be paid while the building programme was underway.

Earlier this month, a consultation paper was drawn up which will be open to public comment.  Public hearings will be held in Pretoria on 22 November 2008.