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Government supports 53% hike
19/03/2008 22:07 - (SA)
Johannesburg - The government supported Eskom's bid for a 53% tariff increase, the Department of Public Enterprises said on Wednesday.
"In light of the sharp increases in fuel costs - specifically coal and diesel - and the need for the immediate implementation of an accelerated demand side management programme, government supports the principle of an electricity tariff increase to cater for these costs," it said in a statement.
It explained the price hike the parastatal had requested from the National Energy Regulator of South Africa (Nersa) would constitute "essential cash flow" to allow Eskom to deal with the rising costs of fuel and diesel.
The utility was now paying 25% to 30% more than budgeted for these resources.
"The increase will also be used to fund the accelerated demand side management programme - which is part of the National Emergency Response Plan - and is intended to reduce electricity consumption in order to alleviate pressure on the system." Move condemned
On Tuesday, Nersa announced that the power utility had officially applied for a 53% tariff increase.
The move was condemned by political parties and trade unions, who felt the poor would be hit hardest by the hike.
The department, however, said measures to "soften the impact" of the hike for the most vulnerable, including the poor, low income households and small businesses, had been proposed.
"The impact of a significant tariff increase on small and medium enterprises (SME) will be mitigated by the migration of SME customers to a time-of-use tariff structure where possible," it said.
This would allow these businesses to minimise their electricity costs by structuring their electricity usage to take advantage of the cheaper standard and off-peak periods through installing a time-of-use meter.
- SAPA
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