You already know that there is an ongoing public hearing concerning Eskom’s request to hike tariff. The South African electricity public utility intended to recover about R23 billion which was spent during the 2013/2014 financial year. The money according to Eskom’s spokesperson Khulu Phasiwe, was used to avoid and minimize load-shedding.
According to the spokesperson, the National Energy Regulator of South Africa (Nersa) is tasked to evaluate and decided on whether or not to allow Eskom to hike its tariffs come February. “The regulator will check if we’ve prudently used their money and if satisfied we’ll get the money back,” Phasiwe stated.
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The public hearings by Nersa into Eskom’s application that recently commenced in Cape Town, gave the power utility outlet the opportunity to lament about the loss it suffered in the last financial year. Eskom related that it lost approximately, R12 billion in revenue during the last financial year because of a lower demand of electricity.
Phasiwe faulted the collapsing economy as the cause of Eskom losing billions in revenue. EWN quoted Phasiwe saying; “the economy has not been doing well and as a result, many of the big manufacturers and the mining sector have not been using as much electricity as they used to before.”
Also, Eskom want to as well recover R8 billion which was spent on the procurement of diesel.
While Eskom has been publicly criticized for lacking the ability to control cost, Nersa scrutinized the use and maintenance of Eskom’s diesel generators which cost the power utility R8 billion in only one year. The energy regulator body revealed that it approved R10 billion for the open cycle gas turbines over a period of five years, and cannot understand how Eskom spent more than half (R8 billion) of the sum in just one year.
Speaking, Nersa’s chairperson, Thembani Bukula stated; “their application in the multi-price determination only wanted R10 billion for the five years. So to spend R8 billion in the first year is something that we are struggling to understand.” Eskom however argued that the over spending was an outcome of preventing load-shedding.
Essentially, the power outlet which is out to recover about R23 billion via an increase in tariff as it has applied for, will result to a 16 percent tariff increase if Nersa approve the application.
Phasiwe explained that if Eskom were to get an extra percent on top of the eight percent that was approved in 2013, “then effectively it would mean that at the beginning of April we’ll have a 16 percent tariff increase.”