HomeIndustry SectorsFinance and PolicyGovernment may delay electricity tariff increases

Government may delay electricity tariff increases

Cape Town, South Africa — ESI-AFRICA.COM — 08 December 2011 – The South African government may delay electricity tariff increases “’ a move which will no doubt be welcomed by consumers, but is likely to hurt state-owned national power utility Eskom’s funding drive.

Citing Reuters, Fin24 points out that last year the power regulator granted Eskom a 24.8% tariff increase for the 2010/11 financial year, which is well short of a requested 35% hike.

For the next two financial years Eskom was granted increases of 25.8% and 25.9% respectively, as it seeks cash to build new power plants in the world’s top platinum producer and major gold exporter.

“What we are considering is an approach that delays the tariff increase,” energy minister Dipuo Peters said in a written response to questions in parliament.

“This is being considered in the next tariff determination for the period starting in 2013,” she said, but did not give further details about possible rate adjustments.

Eskom, which provides almost all of South Africa’s power, expects its debt to reach R400 billion in three years’ time as it ramps up funding to build new power plants and prevent a repeat of power shortages in 2008, which crippled the key mining sector for several days.