http://www.engineeringnews.co.za/article/eskom-to-finalise-tariff-application-by-august-2012-07-19

Eskom to finalise tariff application by August

Published 19 Jul 12       By: Idéle Esterhuizen
National power producer Eskom would submit its tariff application to the National Energy Regulator of South Africa (Nersa) by August, CE Brian Dames said this week.

He told Engineering News Online that the utility was in the process of finalising its third multiyear price determination (MYPD). It recently submitted its draft application to the National Treasury and the South African Local Government Association for comment.

The State-owned company previously reported that current tariffs were not sufficient to fund its build programme, which was pivotal in ensuring electricity supply security in South Africa.

However, Dames pointed out that various factor had to be considered in determining South Africa’s electricity tariffs going forward.

“We are very conscious of the impact of tariffs on job creation and economic growth in South Africa. But we must also be conscious of the fact that we need to invest in capacity. Not just us [Eskom], but the broader industry and private sector as well,” he noted.

A confidential document obtained by newswire Reuters last week, stated that Eskom had applied to raise tariffs by 14.6% a year over five years. The tariff increases could reach a yearly average of 19% over the same period, depending on if the government implemented a carbon tax or built new plants beyond those currently under construction, the Reuters story stated.

Eskom was granted three years of 25% power tariff hikes in 2010.

Under the second MYPD, Nersa approved average electricity price increases of 25% for the period from April 1, 2010, to March 31, 2013. However, earlier this year, the regulator announced that Eskom’s tariff increase was reduced to 16% for 2012/13, rather than the previously approved 25.9%.