Watchdog backs Eskom’s shock price hike

Published Oct 3, 2014

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Johannesburg - South African power prices will rise an average 13 percent from April, more than the 8 percent first planned, to help the state-owned utility recover 7.8 billion rand of unbudgeted costs, the regulator said.

The National Energy Regulator of South Africa in July found costs for Eskom exceeded projections in the three years through 2013, paving the way for higher tariffs.

The company had applied to recover 18.4 billion rand.

The inflation rate was 6.4 percent in August.

The recovery will apply for the year through March 2016, the Pretoria-based regulator said in an e-mailed statement today.

Eskom, which provides 95 percent of the country’s power, has been forced to implement managed blackouts this year as it struggles to meet demand with supply.

The company has a 225 billion-rand shortfall in funding over five years through March 2018.

The government’s rescue plan for the utility includes a capital injection and an increase in government-guaranteed debt. - Bloomberg News

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