Electricity tariffs under South Africa’s main electricity producer will increase by 9.4% from 1 April.
The National Energy Regulator of South Africa (NERSA) approved the rise, which applies to standard tariff and international customers of Eskom, and will enable the company to recover R11.2bn. Eskom provides around 95% of the country’s electricity and 45% of Africa’s energy.
The electricity producer had requested a 16.6% price increase, amounting to R22.8bn, in order to cover the cost of the open cycle gas turbines (OCGTs) that it uses to deal with power outages.
Eskom’s group chief executive Brian Molefe said NERSA’s decision will have operational consequences for the company because it could no longer recover the cost of OCGTs.
“We note with concern the decision on OCGTs, which will guide Eskom’s operations in the future in terms of balancing the energy supply and demand in a bid to avoid load shedding [avoiding excessive electricity load on generators by interrupting the electricity supply],” he said.
“OCGTs are part of our emergency portfolio and have been used in the past to avoid or limit load shedding with the understanding that we can recover these costs. The recovery of diesel costs is now seriously in question with NERSA’s current decision,” he added.
Eskom’s application for the price increase in November 2015 was opposed by businesses and individuals in written comments to NERSA. Public hearings were conducted in six of South Africa’s provinces between January and February this year for stakeholders to have the opportunity to present their views, facts and evidence.
NERSA said the reasons for its decision would be published on its website “in due course”.