Picture: BLOOMBERG
Picture: BLOOMBERG

From trade unions to big business, reactions ranged from dismay to lukewarm acceptance of the National Energy Regulator of SA’s (Nersa’s) decision on Friday to allow Eskom to hike tariffs to customers by 5.23% in the 12 months to March 31 2019, rather than the 19.9% it requested.

Nersa chairman Jacob Modise said a detailed breakdown of the decision would be published "in due course". Nersa disallowed, among others, R11.1bn of the R62.2bn of expenditure that Eskom asked for, which was mainly employee costs, and R7.6bn of the R34.2bn the utility wanted for independent power producers.

Mbulelo Ncetezo, chairman of the electricity subcommittee, said the R34bn Eskom had requested for independent power producers included projects awarded in bid rounds 3.5 and 4. "We did not allow that because power purchase agreements have not been signed and even if they were signed immediately, they would not be in operation this year."

Eskom spokesman Khulu Phasiwe said the power utility was disappointed but noted the advice of the regulator about improving efficiency.

The Energy Intensive Users Group of Southern Africa, representing SA’s biggest industrial customers, said although it welcomed Nersa’s decision, it was concerned that Eskom’s long-term pricing remained uncertain. Eskom’s liquidity challenge was also a concern.

Eton Group’s analysis for the group showed that SA’s average electricity tariff has risen fivefold in the past 10 years.

Chamber of Mines chief economist Henk Langenhoven said: "This short-term measure must be followed by the design and implementation of a structural adjustment programme of the entire electricity sector where Eskom would be only one of a range of suppliers."

Irvin Jim, general secretary of the National Union of Metalworkers of SA, said the union was dismayed by the decision. Companies could not afford this increase, which would lead to closures and job losses.

mathewsc@businesslive.co.za

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