Business bodies to fight power hikes
• Business chambers reject utility’s proposed increases
Two business chambers have vowed to fight Eskom’s proposed electricity tariff increases, saying the hikes are “unreasonable” and if approved would be commercially devastating in this economic climate. Eskom wants a 19.9% increase in tariffs.
Two business chambers have vowed to fight Eskom’s proposed electricity-tariff hikes, saying they were “unreasonable” and if approved, would be commercially devastating in the current economic climate.
Eskom is looking for a 19.9% increase in tariffs, which means consumers could end up paying up to 27.5% more in 2018.
The National Energy Regulator of SA (Nersa) last week gave the power utility the go-ahead to hold hearings on the proposed tariff hikes. Eskom has applied for a total allowable revenue of R 219.5bn, which translates to a 19.9% average tariffs increase.
“Not only will such an increase be crippling, but in view of the recent disclosures and reports regarding rampant maladministration and governance failures at Eskom, business and commerce is compelled to continue in its endeavours to hold both Eskom and the regulator accountable for their actions, in the interest of the public,” said Nelson Mandela Bay Business Chamber president Thomas Schaefer. It is also feared Eskom will be seeking to recoup additional revenue in relation to the expired multiyear price determination period (extending from 2013–18) of up to R60bn, he said.
“We call on all businesses, locally and nationally, to make their voices heard by submitting written comments before the set deadline of October 13. We want to assure our members that the chamber will be making robust submissions, as well as attending the public hearings in the Eastern Cape and elsewhere if required. We call on our members to attend the hearing on November 1 in Port Elizabeth to show their support.”
The Cape Chamber of Commerce has also opposed the proposed increases.
“Eskom’s huge increases have done enough damage to the economy and it is time to say enough is enough,” Cape Chamber president Janine Myburgh said. “Recent events and disclosures have made it clear that we have been paying for corruption. We have been robbed.”
Eskom submitted its application for allowable revenue in August. This was in accordance with Nersa’s decision in July, when the utility was given 30 days to submit an application that complies with the requirements of the multiyear price determination methodology and the minimum information requirements for tariff application. Nersa is to make its final decision in December, following public hearings on Eskom’s revenue application.
In its application documents, Eskom said its revenue application covers the required hike in 2018-19, after Nersa maintained its revenue decision from 2013 for the 2017-18 year.
“The allowed revenue resulted in an average increase of 2.2% due to the base adjustments made in the preceding years. Inflation-related increases were not catered for,” it said.