Eskom’s Acting CEO Brian Molefe told the media during its quarterly briefing on the electricity system that Eskom doesn’t need “unwanted utterances” about the extraordinary tariff hike that it has asked for to be applied in this financial year.
In May Eskom said that it needs about R52.8 billion to keep the lights on, and back in March applied to the regulator for an urgent application to hike the electricity price by 25.3% for the 2015/16 to 2017/18 period. The utility had already been guaranteed an inflation-busting 12.7% rise in tariffs this year, but essentially wanted to double that.
Visibly annoyed when asked about it, Molefe condemned what he called inaccurate reporting from people “who claim to be experts” on the matter, seeming to suggest that journalists should instead focus only on the figure that isn’t a part of the emergency measures to curb loadshedding.
“The actual application is 6.8% on the basis of what we do. It is a more realistic figure, and the price increase also allows for some extra money to allow us to deal with extraordinary circumstance – which comes to a total of 8%,” he said.
In Eskom’s presentation this morning, Molefe broke down the price increases that have been proposed in the table below. The line marked 1 is the price increase already confirmed for consumers, which contains the 6.8% raise already approved for the “rest of normal costs and returns”.
Here’s the breakdown of the price increases currently on the table which the regulator – Nersa – will be approving or denying on 25th June.
Molefe explained that R10.9 billion (6.4%) and R5.3 billion (3.1%) is for the running of Open Cycle Gas Turbines (OCGT) which are used to supplement power generation. “The additional money is for diesel to mitigate the cost of loadshedding. The cost to the economy will be much bigger if we don’t get that money and into the turbines. We need the diesel to augment the supply of electricity.”
According to Eskom, the overall price to consumers will be 24.7% – which is virtually the same as what the National Energy Regulator of South Africa (Nersa) confirmed, so we’re not entirely sure how media houses have been misquoting the figure.
In related news, Chris Yelland of EE Publishers has published the document he submitted to Nersa during the public consultation here, outlining what he sees as potential flaws in the funding model proposed by Eskom.
[Image – CC by 2.0/Peter Nijenhuis]