5 December 2012

South Africa: Have Your Say On Eskom's Increases

Photo: Chris Kirchhoff
Beaufort West, Western Cape province: Electricity pylons.

Cape Town — Public meetings will be held in South Africa next month to engage the public and measure reaction to Eskom's application to hike electricity prices by 16 percent per annum over the next five years.

The first meeting is due to take place in Cape Town on 15 January, while the last one is scheduled to take place in Gauteng on 31 January next year.

Advertisements informing the public about these meetings are due to start appearing in newspapers from this Friday, said the National Energy Regulator of South Africa (Nersa).

Following these public meetings, Nersa will disclose its decision to the Minister of Energy and Eskom on 28 February. Public interest will play a key role in the determination.

This was disclosed on Tuesday at a National Council of Provinces Select Committee on Economic Development hearing by Brian Sechotlho, the regulator's Head of Department: Electricity, Pricing and Tariffs.

He briefed the committee on Nersa's views about the Multi-Year Price Determination, as Eskom's price increase application is known, as well as agenda points it had ticked off on its timeline since it had first received Eskom's application on 18 October.

Nersa was committed to a transparent consultative process. Therefore discussions with the general public and stakeholders would provide a platform to enable Nersa to interrogate the application, Sechotlho said.

In deciding on the application, Nersa would use what it called six pillars. This included reviewing previous decisions and current regulatory rules; analysing the prevailing economic, social, political and legal environment; doing an actual analysis of the date received from Eskom and consultation with a broad spectrum of stakeholders to get their views and comments.

Committee members reminded the Nersa delegation that the regulator had on previous occasions declined to give Eskom the full increase it had asked for, and urged it to do so again with the present MYPD.

At the briefing, Eskom said that the proposed tariff increase was necessary.

South Africa had for years enjoyed some of the lowest electricity prices in the world. However, in real terms, current electricity prices stood where they would have been in 1978. The application was an attempt to get Eskom to what it called a "normalised model".

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