City Power rejects Eskom’s 66% tariff hike proposal

City Power has submitted a comprehensive report to the National Energy Regulator of South Africa (NERSA), strongly objecting to Eskom’s proposed tariff increase of up to 66% over the next three years.

According to Isaac Mangena, spokesperson for the Department of Public Relations and Communication at City Power, the proposed tariff increase is excessive and unsustainable, posing a significant threat to the economic stability and social fabric of communities.

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“We urge NERSA to consider our recommendations and work towards a tariff increase that is fair, manageable, and reflective of the economic conditions facing both Eskom and its customers,” said Mangena.

City Power’s submission emphasises the need for a balanced approach between cost reflectivity of tariffs and prudent cost management.

The utility provider suggests that Eskom should be held accountable for not applying prudent cost management practices, particularly with regards to primary energy costs.

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Key concerns raised by City Power include:

• Excessive primary energy cost increases, with a proposed 38% increase for the next financial year
• Inefficient management of coal burn rates and coal prices
• Over-reliance on open cycle gas turbines
• Slow rollout of the independent power producers program
City Power recommends that NERSA should limit the annual tariff increase to no more than 11%, ensuring that Eskom can sustain itself while acknowledging the financial realities faced by consumers.
“We call upon NERSA to carefully consider our recommendations and work towards a tariff increase that is fair, manageable, and reflective of the economic conditions facing both Eskom and its customers,” said Mangena.