‘Eskom increase inevitable’

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PowerLines Reuters.

Johannesburg - South Africans will have no choice but to accept Eskom's five year tariff hike, trade union Solidarity said on Tuesday.

Researcher Paul Joubert said the monopolistic structure of the electricity market made it almost impossible to know whether the prices Eskom and energy regulator Nersa agreed on would be appropriate.

Last week, the National Energy Regulator of SA (Nersa) held hearings into the proposed increase.

Eskom requested a 16 percent increase in electricity prices each year for the next five years.

The proposal will more than double the price of electricity in five years, taking it from 61 cents a kilowatt hour in 2012/13, to 128 cents a kWh in 2017/18.

Joubert suggested that independent electricity generators be allowed into the energy market.

“(We) submit that the electricity generation space be opened up for independent generators to directly conclude agreements with consumers or local distributors of electricity, with Eskom's only role in such transactions being facilitating the “wheeling” of the electricity over the transmission network for a nominal fee,” he said.

“By limiting the freedom of other possible investors in the electricity generation market to attempt to beat these forecasts, and possibly profiting due to superior ability, Eskom, Nersa and the government are acting to the detriment of South African consumers,” he said.

Joubert said any mistakes that Eskom and Nersa made over previous hikes affected consumers who, except for the option to generate their own power, had no choice but to buy electricity from Eskom.

He said since previous hikes meant to boost the electricity producer were unsuccessful, he had little faith this one would be different. - Sapa


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