20 March 2008 – South Africa’s department of public enterprises has reportedly supported Eskom’s bid for a tariff increase.

electricityIn a statement, the department said "In light of the sharp increases in fuel costs, specifically coal and diesel, and the need for the immediate implementation of an accelerated demand side management programme, government supports the principle of an electricity tariff increase to cater for these costs."

The statement explained that the increase would provide "essential cash flow" to deal with rising fuel and diesel costs. The utility is paying between 25% and 30% more than budgeted for these resources.

"The increase will also be used to fund the accelerated demand side management programme, which is part of the National Emergency Response Plan, and is intended to reduce electricity consumption in order to alleviate pressure on the system."

According to the department, efforts to soften the blow for the most vulnerable consumers, such as low income households and small businesses had been proposed.

"The impact of a significant tariff increase on small and medium enterprises (SME) will be mitigated by the migration of SME customers to a time-of-use tariff structure where possible," the statement said.