Property industry joins call to scupper Eskom tariff bid

21st January 2016

By: Natalie Greve

Creamer Media Contributing Editor Online

  

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As one of the latest organisations to come out in opposition to a tariff hike application by Eskom, the South African Property Owner’s Association (Sapoa) has cautioned that the energy utility’s 16% price hike bid, if approved, would have a considerably negative effect on the South African property industry.

“The huge increase will definitely have an effect on the property industry in an economy which is slowing at a rapid pace, where vacancy rates are on the increase, and where many retailers are closing down due to high rental costs," commented Sapoa CEO Neil Gopal, whose organisation represented retail, office and industrial property owners.

Eskom’s application came as a regulation to affect the roll-out of smart electricity meters was being revised, which would, Sapoa argued, improve grid control and revenue management.

“We are in for a bumpy ride and a significant game change in the property sector in so far as utilities are concerned,” he cautioned.

The National Energy Regulator of South Africa (Nersa) continued to hold public hearings on Eskom’s application for the evaluation and approval of the clawback of the regulatory clearing account (RCA) balance for the financial year 2013/14 for the third multiyear price determination (MYPD3).

The RCA process reconciled variances between the actual costs that Eskom incurred in each financial year in the production of electricity and the MYPD record of decision by Nersa.

Eskom had submitted an RCA application to recover R22.8-billion, translating into a proposed 16% tariff increase.
 

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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