Power Crisis

Eskom may seek 34% tariff hike

2009-03-30 10:48

Special Report

Electricity usage down in Dec

Estimated consumption of electricity in December 2008 fell by 8.4% compared with December 2007 to 17 556 gigawatt-hours, Statistics SA says.

Johannesburg - State-owned utility Eskom is set to seek a 34% hike in electricity tariffs, back from the 88% rise it had been considering due to the global economic slowdown, a newspaper said on Monday.

South Africa's Business Day newspaper said on its front page that Eskom's tariff request for this year took into account the damage a big rise could do to an economy expected to slow down and hardly show signs of growth this year.

When granting a tariff hike last June, the power regulator said electricity prices could rise by between 20% and 25% a year over the next three years.

Fani Zulu, Eskom's spokesperson told Reuters he could not comment on the tariff increase reported by the newspaper.

He said the utility would make the tariff application in weeks, but declined to be more specific.

"I can't comment on their (Business Day's) numbers. We have not made public any numbers as far as the tariff application is concerned," Zulu told Reuters.

The Business Day quoted Eskom's chairperson Bobby Godsell saying the utility's board was yet to decide on the application.

Eskom's board is expected to meet this week to discuss the tariff application, which was originally meant to be submitted to the power regulator by October last year, the newspaper said.

Eskom wants a tariff increase to help fund its power expansion programme over the next five years, estimated to cost R343bn.

"The board has met several times, and whenever they have met the tariff application has been on the agenda. Eskom is still working on the tariff application," Zulu said.

Eskom, which provides 95% of the country's power, has rationed electricity since early last year, when the national grid's near collapse forced mines and smelters to shut for five days, costing Africa's biggest economy billions of dollars.

- Reuters

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