New Eskom tariffs change the game: Gigaba

By Drum Digital
22 April 2013

Eskom's eight percent electricity tariff hike has "changed the game" for power in South Africa, Public Enterprises Minister Malusi Gigaba said on Monday.

"While the National Energy Regulator of SA's [Nersa] decision... is welcomed, the implications of the lower tariffs and revenue approved on Eskom's operations and overall business sustainability are currently being investigated," he said at an update on Eskom in Johannesburg.

"This decision is surely going to have far-reaching implications. It is clear the Nersa decision changes the game significantly."

He said the regulator's decision was fair to consumers, but not to Eskom.

On February 28, Nersa announced it had granted Eskom an eight percent electricity tariff hike each year for the next five years, in its third multi-year price determination (MYPD3).

The parastatal had applied for a 16 percent increase in each of the next five years.

The previous multi-price determination, MYPD2, ended on March 31, 2013. Both MYPD1 and MYPD2 had spanned three years.

Gigaba said the electricity system could be fragile during winter.

"As we are heading into winter, which is anticipated to be extremely cold given the recent cold spells, I would like to stress the importance of using electricity sparingly.

"Ordinarily, winter is characterised by high electricity demand. However this winter is unique in that it is the first time that Eskom has planned to execute a long-duration maintenance. A partnership to keep the lights on will be even more required than at any other stage before."

Eskom CEO Brian Dames said the planned maintenance for winter would be for 2000 megawatts.

"This is work that we cannot defer for this winter. In the past, we would not have done so much planned work," he said.

Dames said Eskom needed consumers to help prevent rolling blackouts. However, this could happen if a large-scale system shortage, or blackout, was imminent.

"We will not put the country at risk of a blackout...," Dames said.

"If it came to it [however], we will dump the load to protect the country."

Gigaba said Eskom would do whatever it could to prevent blackouts.

-by Sapa

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