Chamber of Commerce objects to Eskom's bid for high tariff rise

File photo: INLSA

File photo: INLSA

Published Oct 11, 2017

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An increase of nearly 20 percent in electricity tariffs will be counter-productive and trap Eskom in a “death spiral”, the Cape Chamber of Commerce and Industry has said.

Following the National Energy Regulator of SA's announcement that Eskom has applied for a 19.9% increase, the Chamber wrote to object, saying the parastatal instead needed to compensate consumers for years of overcharging.

Chamber president Janine Myburgh said the increase would lead to a loss of sales and defections from the electricity grid.

“We submit that tariffs are determined to cover the fair and legitimate costs of producing and selling electricity and nothing else. 

"We strongly object to tariffs that cover the cost of irregular spending, corruption and mismanagement. It has also become clear that wasteful spending and corruption are part of existing tariffs and that it is time for consumers to claw back revenue that has been unjustifiably extracted from them,” Myburgh said.

Nersa yesterday confirmed it received their letter, and Eskom did not respond to questions by deadline.

Energy analyst Chris Yelland said by law Eskom was allowed to recover costs it incurred through electricity tariffs, but this excludes expenses like bribes.

In its application, Eskom would've included all cost claims, which Nersa will examine with a “fine-tooth comb”, Yelland said.

In relation to Myburgh’s statement on loss of sales, Yellend said it was when sales went down that charges went up.

“Kilowatt hours is their product which they use to recover revenue. Nersa will strip cost claims that are not fair. Nersa has never given Eskom what they have asked for, ” Yelland said.

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