Eskom announces an increase in tariffs
Consumers set to pay more for electricity from April 1.
Eskom has confirmed that electricity tariffs will increase from April 1.
Eskom direct customers’ tariffs will increase by 12.69 per cent and municipalities customers’ tariffs will increase by 14.25 per cent as approved by the National Energy Regulator of South Africa (Nersa) during November 2014.
Eskom has since released a statement stating that:
“Eskom’s current financial position, as a result of historical non-cost reflective tariffs and the lag in recovery of eligible expenditure, does not afford Eskom’s balance sheet the ability to pre-fund further costs that are necessitated by a constrained power system such as short term power purchases from independent power producers and municipal generators and the increased use of open cycle gas turbines.
“These constraints have necessitated Eskom to explore options for further review of tariff increases for the 2015/16 financial year.
“Submissions in terms of the Multi-Year Price Determination (MYPD) methodology have been made to Nersa in this regard.
“Eskom has initiated a selective re-opener of the MYPD 3 application from the 2015/16 financial year onwards that proposes an adjustment in the tariffs.
“This is due to costs incurred securing further short term power purchases and increased use of open cycle gas turbines.
“In terms of the Municipal Finance Management Act (MFMA), Eskom is required to first consult with the National Treasury and the South African Local Government Association (SALGA) prior to submitting to Nersa for consideration.
“Eskom will consider these comments before submitting to Nersa.
“Nersa will then follow their normal governance processes before making a decision.”
It has been reported that the announcement in the budget speech of a proposed increase in the environmental levy has also had an impact on electricity tariffs.
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