HomeRegional NewsSouthern AfricaEskom tariff increases on the way

Eskom tariff increases on the way

Jacob Maroga,
CEO, Eskom
27 January 2009 – Speculation continues to rise as to the final cost of electricity to the South African consumer when Eskom, this week, warned that the utility’s capital expansion programme would be accompanied by ‘significant’ increases in tariffs.

The tariff application, which is yet to be submitted to the National Energy Regulator of South Africa (NERSA) is in preparation according to Eskom CEO, Jacob Maroga.  He continued that the utility hoped to have the new tariffs approved by April, when Eskom’s new financial year commenced.

Last year, Eskom applied for a 53% increase in electricity tariffs and drew criticism from a number of quarters, including the ANC, business and government.

Maroga declined to say what the tariff increase applied for would be, but said Eskom had never tried to hide the fact that the capital expansion programme would result in significant tariff increases.

Adding to the utility’s woes was the current economic and financial crisis, which was making securing funding more difficult.

A result of the economic downturn, and the subsequent closure of some ferroalloy and stainless steel smelters, is a reduction of 1 500MW in demand. When combined with an additional 1 000MW to be added this year through the bringing on line of de-mothballed power stations and open-cycle gas turbine power stations, Eskom now has an operational capacity of some 39 500MW.