Eskom says can function with lower tariff hike

2012-03-09 22:01

Pretoria - Power utility Eskom is in a healthy enough financial and operational position to function on the 16% average tariff increase announced by the National Energy Regulator of SA (Nersa), it said on Friday.

The utility's performance would not be crippled by lower revenue in 2012, Eskom CEO Brian Dames said in Pretoria.

Eskom had initially asked for a 25.9% increase, but this was cut by 9.9% because of reduced sales volumes.

"We have had price increases greater than 25% for the past four years which has allowed us to build the reserves and to put together a fully funded expansion plan," said Dames.

He assured South Africans that the cut "would not jeopardise the objective of keeping the lights on" together with scheduled expansion projects.

Dames said Eskom supported the call by President Jacob Zuma for South Africa to have a national pact bringing together business, labour, municipalities and all communities in energy saving.

"We need to introduce more efficient energy usage, reducing electricity demand while improving the overall economic performance," he said.

The group's chief financial officer Paul O'Flaherty said Eskom was now operating in an improved funding environment.

"Most of the funding plan has been secured. The landscape has changed and Eskom's access to debt markets has improved," he said.

Slower capital expenditure had significantly reduced Eskom's borrowing requirement, interest payments and capital repayments, said O'Flaherty.

The new electricity tariff comes into effect from April 1.

The local authority tariff will increase by 13.5% with effect from July 1.

The non local authority tariff increases by 15.9%, with urban tariffs going up 16.7% and rural tariffs by 15.7%.

The residential inclining block tariff goes up 11.1%.

Nersa said the municipal tariff guideline increase was 11.03%.

  • David - 2012-03-09 22:21

    What incentive does Eskom have to operate efficiently? They will show massive profits now, and pay themselves huge bonuses for "the fantastic job" they have done.

      Marion - 2012-03-09 22:59

      ... and throw some more of those exorbitantly priced staff-bonding bashes...

  • Sidney Gilroy - 2012-03-09 22:39

    What Eskom fails to see is that the recession lead to a decrease in consumption due to a lesser demand for commodities. Thats why mines are sitting on reserves of their metals equal to a couple of week's output. Also they are failing to tell the whole truth - the projections are that the smelter in Richardsbay will in all likely-hood close down. Also to a decrease in demand and a lowered price. This will free up a very large amount of power to their grid.

      johan.vanhoff - 2012-03-10 12:35


  • onlyme - 2012-03-09 22:59

    SURE THEY CAN MANAGE..they do not need the tariff hike!!!..somebody wants a big bonus this year(for pointing a finger and saying yes)..

  • Wayne - 2012-03-09 23:05

    "Eskom says can function with lower tariff hike" Yes you can, pay the bosses that do nothing, less.

  • Thomas De Kroon - 2012-03-10 04:48

    President Zooma you absolute beauty. In an ANC national leadership year, with national elections in 2013... What a comeback to secure another term for urself and the ANC.. As our supreme leader to 'instruct' Eskom to 'watch' their power utility increase this year in ur state of the nation address. Our leader has spoken for the people.. I should have gone into ANC politics.. Love it!

  • Dennis - 2012-03-10 05:05

    We are being raped by the corrupt anc EVERY DAY !!

  • Kevin - 2012-03-10 05:45

    Eskom , stop spending money on staff parties and take away all luxuries. Your staff are pampered and way overpaid.At what point can we look forward to massive reductions -say 50%. Bloody thugs

      gbbfg - 2012-03-10 11:54

      Vegi... eh? Are you serious? Please say you're not being serious.

  • Sharon - 2012-03-10 05:49

    The approved hike is still wayyyy above the inflation rate. We are being hit from all directions, and all of these increases affect food prices. Electricity, fuel levy hikes and the e-tolls - heaven only knows what a loaf of bread will cost by the end of the year!

      Piet - 2012-03-10 07:39

      It really seems that Vegi read the article with only one (blind) eye. The reduced increase is due to " reduced sales volumes ". How many businesses went bankrupt because of the exhorbitant price increases of the last 5 years including this ears which is way above the inflation rate, Vegi?. How many mines has scaled down, how many farmers has decided that they cannot produce their crops with the cost of electricity as it is, Vegi?. And while all this is going on the fat cats (your chommies?) at Eskom is partying away the MILLIONS that they reaped ( raped ) from the citizens.

  • Derek - 2012-03-10 06:21

    And what happens next year?

  • Philip - 2012-03-10 07:27

    So if the National Energy Regulator of SA (Nersa) had not intervened, would Eskom have passed this savings onto the South African public? I think not! A bunch of thieves who don't care about the suffering they cause in this country with the exhorbitant increases they implement, and this based on short sighted planning, selling power to other countries, and abuse of power.

  • margiemeek - 2012-03-10 07:33

    16% increase is a huge and unfair increase. Telling us that we are lucky it is not 25% and that Eskom will battle along with the lower rate is a well known ploy to make us feel gratefull. On top of the already high increases I think we have had enough. Are the directors still getting a huge bonus this year??

  • Paul - 2012-03-10 07:36

    Regulate the coal industry. The price of coal (RB#3) has increased 70% since 2009. Many of the ex and current board members of Eskom has personal interests in the coal industry that supplies Eskom. The should be investigated for conflict of interest. If the prices of the coal used by Eskom was capped, we would pay less for electricity. This does however not deter from the fact that Eskom has a bloated management structure that is inefficient and Eskom spends too much money on luxuries (i.e. meetings at wine estates and hotels, promotional gifts, etc)

  • Sunette - 2012-03-10 07:37

    You've got to love it when the Spindocters try and make a 16% price hike sound like a gift just because it's not a 25% hike! Fact remains that the price of electricity will have gone up by 41% in 2 years after this hike! It is simply ludicrous as NO one gets a 41% raise in 2 years! They did exactly the same with the toll fees... First telling us it will be 56c/km and then "reducing" it to 30c! There is no such thing as a "Reduction" in something that wasn't there before! ...but as long as they can make it sound like a favour, they will retain the votes! Pathetic really!

      gbbfg - 2012-03-10 12:43

      That's exactly it. If you can explain it to Vegi I'll invite your family over for dinner.

      Mano-Lee - 2012-03-10 17:42

      @gbbfb - dont waste your breath on vegi. she is not worth it. Its the worst case of brain washing i've seen in SA. Just let her write her drivel, it helps her learn.

  • Geoff - 2012-03-10 07:54

    The question is not so much wether Eskom can afford to "keeo the lights On' it's more can we afford to switch them on.

  • Andrew - 2012-03-10 08:16

    How come NERSA awarded 25.9% in the first place? Does not say much for their credibility?

      Stuart - 2012-03-10 10:13

      Has no one figured that it is highly likely, if not probable, that Eskom have pulled a fast one from the beginning? If not for the inconvenience of the blackouts it is extremely unlikely that the regulator would have agreed to anything over 10%. Why have we not, as a nation, figured the con out yet? Eskom are not as dumb as we accuse them of being....

  • Stuart - 2012-03-10 09:33

    Has no one figured that it is highly likely, if not probable, that Eskom have pulled a fast one from the beginning? Remember the power blackouts? Amazing that the last blackout was about the time the Regulator decided to allow Eskom to hike the tariff by 34% and then 25% per year for 5 years!! What changed? No extra power was created so it lends credence to the theory that Eskom's intention was to shock the economy into agreeing to a massive 300% (in total) increase!! If not for the inconvenience of the blackouts it is extremely unlikely that the regulator would have agreed to anything over 10%. Why have we not, as a nation, figured the con out yet? Eskom are not as dumb as we accuse them of being.

      gbbfg - 2012-03-10 12:42

      Mmmm. I never did understand the middle of summer shortages, while winter was fine. Of course we could be talking rubbish and it's pure coincidence but nobody can blame us for suspecting this stuff with the current state of affairs.

      Mano-Lee - 2012-03-10 17:44

      Spot on Stuart. Order out of chaos. Create the chaos first and then bring the solution. Of course make sure you buy shares in the company first ;)

  • Danie - 2012-03-10 10:41

    Ok, lets use a good young persons salary and expenses or an avaergae office worker or bank clerk ---- power bill is R1000, petrol 200 litres(one tank a week for getting to work) - Salary R15000 - 16% electricity = R 160 + Petrol New levy 50c p/l = R20 and price increase 38c = R 76 + new tolls R 550 = R 768 and then all the food prices are up beacause of this and the person gets a 5-7% increase. YOU ARE KILLING THE GOOSE THAT LAY THE GOLDEN EGG - WAKE UP GOVERMENT...

      Danie - 2012-03-10 10:42

      Oh yes and remeber the execs in Eskom got a 100-105% increaselast year and the workers something like 7%...

      Rob - 2012-03-11 08:15

      @Danie - Who got 100% increase? Please name one person at Eskom who got more that 15%? You just made that up.

      Rob - 2012-03-11 08:16

      Another thing, which "young person" uses R1000 of electricity a month? I know families of 4 that use far less than that.

  • Teboho Mphaloane - 2012-03-10 11:12

    Miss the good ol' days when a R10 prepaid coupon could reasonably last. These days it's like a joke. And then ofcourse our electricity woes...

      Vegi - 2012-03-10 13:17

      You want a free ride. You are not forced to use electricity.

      Mano-Lee - 2012-03-10 17:47

      @vegi - where do you come from? You yourself advocate a 'free ride'. You want land for free, you want business for free... Pot calling the kettle black neh?

      Kevin - 2012-03-11 11:24

      Vegi , did your mother love you?

  • Henry - 2012-03-10 11:17

    Is there an election comming up??

  • Vegi - 2012-03-10 13:09

    Why are you deleting comments because they speak out against what News24 loves. We know that you are against this government. In fact you loved the evil apartheid regime, that is why you delete all comments that are praising this democratic government while leaving those that imply that the murderous apartheid regime was better.

      Mano-Lee - 2012-03-10 17:49

      @vegi - who is 'we'. Oh, must be that paw paw you follow

      Kevin - 2012-03-11 11:26

      one has to worry about anyone who is voting for this corrupt thieving thugs who call themselves the government.

      Clive - 2012-03-11 11:46

      Don't be so childish. Just because we don't like this inept, corrupt self-enriching govt, doesn't mean in the least that we "loved" apartheid. This is supposed to be democracy which means - in case you don't understand the term - that we not only have a right to oppose the govt of the day, we actually have a duty to do so when we see them screwing up by putting "the party" and its leaders ahead of country.

  • Vegi - 2012-03-10 13:15

    Why did you delete a comment where I said Eskom is doing a sterling job of delivering to everybody instead of only to cities and to white people. This is the truth. People who had electricity in rural areas were only white people. Blacks who had electricity were only in cities and townships whereas whites got electricity wherever they were. Why do you want us to lie and praise your beloved apartheid government.

      FinalJustice - 2012-03-10 15:36

      @Vegi - I honestly think that N24 automatically deletes every 3rd comment you make by default. Because of all the SHAIT that comes from your compromised cranial organ (brain) you've earned a customized plug-in for their programming sequence, so try and be proud of it - for what's it's worth - and don't be so sensitive bro!

      david.lebethe - 2012-03-10 16:09

      @Vegi. Pride yourself with the fact they read your message and find it apt and accurate that they just can't live with it. I don't read much into their stastics either. I always take pride in the number of responses I get from other readers whether positive or negative (even though most negative reports lack substance). I like he/she whose arguments are persuasive than those who will only disagree without giving one the benefit of their disagreement.

      Kevin - 2012-03-11 11:29

      Because they are talking sh#t in your head and you believe it. Cut all illegal connections and take away the free electricity token given to everyone and watch how much more money they have . Does anyone know the cost of these two acceptable and unnecessary practices.

  • Viman Singh - 2012-03-10 16:04

    Honestly and lets be realistic : If we have a black person heading eskom its services will always be poor. Whatever a white man touches turns to gold and whatever a black man touches turns to $h¡t. Sad to say but thats true.\r\nBlacks should just follow and not lead. Im black too.

  • armcua001 - 2012-03-10 16:07

    These guys are amazing! To label a significant increase as a cut!!! Pure genius! The increase is still over double the inflation rate

  • Simthandile Mpondo - 2012-03-11 07:19

    Viman umincu shame. Go bleach ur skin ube white qha ke.

  • Simthandile Mpondo - 2012-03-11 07:25

    Vegi the truth must be told. These white people think they were and still r the best things since sliced cheese. They were also corrupt but we never got to hear coz besivalelekile.

      Kevin - 2012-03-11 11:31

      Just be thankful that the whitey lets you play with all the nice things he invented instead of you running around a thatch rondawel looking for a corner to pis# in

  • reza.daniels1 - 2012-03-12 10:17

    That's like telling me I can pull my pants up.......but only to my knees....I'm still exposed, vulnerable and exploited. Do you really think handing me some vaseline is gonna help me in the long run?

  • Erena - 2012-03-12 15:41

    Eskom must think the SA public is a lot of IDIOTS - do you thing plying pricy pricy will make us THANK you for not doing your jobs rubish

  • abduraghmaan - 2012-04-02 13:48

    We need WikiLeaks SA, where are all those fat cats payslips !

  • Adam - 2012-05-01 13:21

    I'm just wondering if anyone has heard of the Turbo Element, I think that's what they call it. They claim to save 40% of each geysers electricity usage, without affecting your geyser use. Does anyone know if this really works?

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