Cape Town - Consumers cannot afford to help Eskom “claw back” R22.8 billion by having electricity tariffs increased by 17 percent, Cape Chamber of Commerce and Industry president Janine Myburgh said yesterday.
The parastatal applied to the National Energy Regulator of SA (Nersa) to recover the money it lost through revenue under recoveries, higher expenditure on coal burn and other energy costs.
If approved, the increase will come into effect on April 1.
Nersa started public hearings yesterday into Eskom wanting to recover, among others, R11.7bn for a shortfall in revenue, R8bn in costs for open cycle gas turbine plants and R2.6bn in other energy costs.
The public hearings end on February 5 and a decision on Eskom’s application will be made on February 25, Nersa spokesperson Charles Hlebela said yesterday.
Myburgh said it was unfair to expect the public to carry Eskom’s burden. “We certainly do not believe that business and consumers can afford an increase of this magnitude on top of other increases that will flow from the weakening rand and rising import costs. Add to this the effects of the drought on food prices and it will be a major blow to the country.
“The proposed increase is to ‘claw back’ money already spent. The main reasons for the overspending were that Eskom completely overestimated the demand for electricity. Actual electricity sales were much lower than expected and this reduced Eskom’s income,” Myburgh said.
Eskom said investors are seeking certainty and stability from the regulatory process and Eskom has recently been downgraded by rating agencies, and a favourable regulatory clearing account process would improve investor confidence. “Funding security ensures that the build programme remains on course for completion. Sufficient revenue allows Eskom to continue with the generation performance improvement programme to the benefit of all customers,” the statement read.
National Consumer Commission spokesperson Trevor Hattingh said consumer disposable income would be reduced and with electricity being a fundamental input commodity to many sectors, an increase in electricity tariffs was likely to have a ripple effect on costs for goods and services.
An increase would come at a time when the country is facing severe drought and threats to crops and livestock.
It has been reported that farmers have their highest debt with South African banks yet, of more than R125 billion.
Drought is destroying cornfields and discouraging the planting of crops, and it has been reported that in Limpopo at least 5 000 animals have been killed, according to preliminary figures by that province’s agriculture department.
CAPE TIMES