Eskom mulls effect of lower tariff increase amid its weakening liquidity
The utility says it is reviewing and modelling the lower tariff and the possible effect it would have on the business and financial sustainability
Eskom is still studying the effect of a tariff increase that was about a quarter of what it requested as shrinking liquidity threatens the utility. An award by the state energy regulator last month of a 5.2% increase from April 1, compared with its application for almost 20%, "has a major impact", the utility said in an e-mailed response to questions. "Eskom is still in the process of reviewing and modelling this lower tariff determination and potential impact on the business and financial sustainability." The producer is the biggest recipient of state guarantees at a time when SA’s finances are buckling under lower tax revenue and rising debt. Domestic demand for electricity is at the lowest in more than a decade, hurting Eskom’s revenue, even after the average annual price increase was more than double the inflation rate since 2007. The National Energy Regulator of SA (Nersa) in announcing the award in December said it only allowed prudent costs. Public Enterprises Minister Lynne ...
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