Eskom: what it wants, needs and expects

Published Jun 30, 2008

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- Eskom wants the power to change electricity prices in tandem with the price of fuel used to power its stations, similar to the way the local price of petrol changes on a monthly basis to reflect global crude oil costs.

- The National Energy Regulator of South Africa is already developing a flow-through mechanism that would take into account "unforeseen changes in primary energy, and other, costs".

- Before Eskom won approval to expand its capacity in 2004, electricity prices were set once a year by the energy regulator.

- Eskom declined to say if it expected to break even in the year to next March as the government had yet to clarify the terms and timeframes for R60 billion in state funding announced in February, so the utility could not yet calculate its budget and spending.

- The utility's failure to secure a 60 percent increase this year would not cause it to halt or slow development on any of its projects.

- Standard & Poor's yesterday said this year's 27.5 percent hike in electricity tariffs, as well as expectations of increases of between 20 percent and 25 percent in the following three years, was "supportive of Eskom's credit quality". - Justin Brown

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