Monday, October 22, 2012

Deadline looms for public comments on Eskom tariffs

Pretoria - The public has until 20 November to make written submissions to the National Energy Regulator of SA (Nersa) in respect of Eskom's total 16% tariff increase for the next five years.

At a briefing on Monday, Eskom Chief Executive Officer Brian Dames said the power parastatal had asked Nersa for the 16% increase of which 13% would be for the parastastal's own needs for the five year period plus 3% to support the introduction of Independent Power Producers (IPPs).

The current Multi-Year Price Determination, MYPD 2, expires in March 2013. Eskom has proposed that there be a five-year determination for MYPD 3, running from 1 April 2013 to 31 March 2018. The previous determinations, for MYPD 1 and MYPD 2, have been made over a three-year period.

On Monday, Nersa said it received the MYPD 3 application on 18 October.

"The regulator will follow due process in considering Eskom's application," Nersa spokesperson Charles Hlebela said.

The public which has been urged to participate in the process have until 20 November to submit their written comments at

"Nersa would like to encourage all stakeholders and the public to actively participate in this process by submitting written comments and attending or making oral representation at the public hearings to be held in January 2013," said Hlebela.

The public hearings will be held in all nine provinces from 15 to 31 January 2013 with a decision expected on 28 February 2013.

Eskom board chairman Zola Tsotsi said the submission to the regulator came at a time when the world is facing tough times. "The MYPD 3 comes in a negative economic climate. Our economy is still faced with poverty and unemployment," he said, adding that the tariff request should be seen in a developmental light.

Dames said the utility hopes for a debate on the application. "It is not only about electricity but about choices we have to make as a country."

He said the company was planning for a growing and successful economy.

"For that we need to continue to invest in the electricity infrastructure which can support higher rates of economic growth and development and extend access to electricity to all South Africans. Our application balances South Africa's needs for a secure supply of power and for a sustainable electricity industry, with our recognition of the impact which tariff increases have on the economy, particularly on the poor," he said.

In June, Eskom submitted its draft MYPD 3 to the SA Local Government Association (Salga) and National Treasury for comment. At a breakfast in July, Dames announced that the utility had not yet determined its final application.

Standard Bank senior economist Thabi Leoka said: "It's a good number; it is similar to the 2012/13 one."

Asked if the public would be able to absorb the tariff should it be approved she said: "If we look at growth and consumer behaviour, consumers are struggling and the tariff will have an impact on disposable income," she said, adding that the outlook for growth and employment was not rosy.

In March, the regulator approved a reduced tariff increase of 16% down from the original 25.9% approved in the MYPD 2. -
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