February 22, 2008, 15:30
Eskom said it wanted the energy regulator to let it put up prices more than the 14.2% tariff hike it was granted last year, citing escalating coal prices as it battles a nationwide power crisis.
The Congress of SA Trade Unions (Cosatu) said it would consider protests if electricity prices go up again, potentially exacerbating a crisis that has disrupted mining and fanned investor worries over the country’s economy.
The Reserve Bank declined comment on Eskom's request, but has said excessive tariff increases will add to inflationary pressure, already high because of rising food and fuel prices.
Eskom, which generates most of its electricity from coal, said it wanted tariffs hiked even more than the 18.7% it had initially requested last year but which was rejected by the regulator.
"Market forces have moved materially, especially the price of coal, and there has to be a pass through on primary energy costs," Eskom Financial Director Bongani Nqwababa said. "The tariff increase request will be much higher than when we made the application for an 18.7% increase."
The 14.2% tariff increase is for Eskom's 2008/09 financial year, which runs from April to end-March 2009. Nqwababa said Eskom hoped to meet the National Energy Regulator (NERSA) within the next two weeks on the review.
"We cannot say that we will not consider it. We will look at the application they (Eskom) present," Brian Sechotlho, who heads NERSA's electricity pricing and tariffs department said.
Eskom has said the current tariff hike would make it hard for the utility to pay for coal, maintain and expand its power generation capacity to meet demand, and it meant the power firm would have to borrow more
1 comment:
Nobody will ever understand why Eskom
or other related companies put pressure on governments to shoot up prices seeing that coal is largely available worldwide and there is no real reason for hiking up prices,take Italy as a disgusting example,the island of Sardegna is a huge mountain of coal but back in the eighties when I was still in the Carabinieri(Nato's Military Police)my Btg was sent to face up with 30.000 demonstrators who had lost their jobs due to the closing down of all italian coal mines and certainly not for shortage of raw materials but as a result of political business,Italy buys coal from UK and France with the famtastic result of all those people jobless and an increase measured to this day of 150% and fully operational coal mines closed down.Last year we bought electricity from Switzerland after a two day blackout.
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