Nersa warned on Eskom tariff hike

2010-01-20 17:10

Cape Town - The National Energy Regulator of SA (Nersa) should not use power utility Eskom's application for a tariff increase of 35% a year over the next three years, to rule on municipal tariff increases, Cape Town deputy mayor Ian Neilson said on Wednesday.

Speaking in Cape Town at a Nersa hearing on Eskom's controversial application, he said this would be "wholly improper".

The city believed Eskom's application did not "provide any information to Nersa about any limitation it might wish to set on the municipality's increases".

There existed significant local government legislation dealing with tariff-setting, and Nersa had to stick to the requirements of these legal processes, which were separate from those of Eskom, he said.

Neilson also said that if Eskom got the go-ahead to increase its tariffs by 35% a year over the next three years, Cape Town would have to hike its electricity tariffs by about 29%.

"If it's the case that Eskom gets such an enormous increase... of 35%, we're looking at perhaps having to increase our tariffs to our customers by round about 29%," he said.

This would place an enormous burden on especially middle-income consumers, who were already hard hit having to carry the burden of Eskom providing lower rates for key industries and indigent people.