Page 7 - AfrElec Week 38 2022

AfrElec ESKOM AfrElec

Eskom demands 32% tariff

increase from regulator

MOROCCO SOUTH Africa’s state power utility Eskom -- tariff and the cost incurred in production.
which has been ramping up rolling blackouts “If we do not have the tariff we asked for, it is
-- has warned the National Energy Regulator only a matter of time before we are in the same
of South Africa (NERSA) to grant the full 32% situation again. We have exhausted the capacity
tariff increase it requires in the 2023 year or face of the assets and we still want higher production
the consequences, Independent Online (IOL) from them. If we do not take the assets out for
reports. maintenance, they soon take themselves out,” the
Eskom, in an appearance before the NERSA economist said.
on September 21 to justify its fifth multi-year According to Masike, the 32% increase would
price determination (MYPD 5), said if the tariff help in a 0.6% increase in the gross domestic
were not granted the struggling utility would risk product (GDP) as Eskom would be able to be
further deterioration of assets as it was unable to more efficient in producing electricity, about
carry out planned maintenance with the current 80% of which was consumed by industry and
rates it was paid. agriculture.
Kabelo Masike, a senior treasury economist Masike’s assertions were met with incredulity
at Eskom, said that by discounting elements of by NERSA commissioners, who questioned the
the proposal, including costs incurred, to give a continuously deteriorating energy availability
lower tariff determination NERSA only delayed factor (EAF), which has slipped from 75% to a
having to deal with the problem. low of 59% now, writes IOL.
“The lower inflation tariff scenario is always Commissioners asked if the projections had
the more favourable, but the shortfall has to be been made with consideration of the current
made up for in some way somewhere down the load-shedding programme, which peaking at
line, whether it is through increases taxes or stage 6 (6,000MW) had cost the industry and
some kind of injections from the shareholder, economy in lost production times.
which is the government,” Masike was quoted The Energy Intensive Users Group (EIUG)
by IOL as saying. has questioned the affordability of Eskom’s appli-
The middle option of borrowings, Masike cation because 32% had a significant impact on
said, would attract further service costs. He members’ operations considering that for some
noted that, according to the World Bank, in electricity represented 40% of costs, reports
several African countries the energy crisis was IOL.™
in part due to the huge difference between the

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