Alert issued on price hike

Bay businesses lead challenge against Eskom

NELSON Mandela Bay businesses and residents are set to gather in Zwide tomorrow for a public hearing to oppose the nearly 17% increase proposed by power utility Eskom. The proposed increase – said to go against a 2013 agreement to increase tariffs by 8% each year until 2018 – has sparked anger, with businesses warning it would worsen an already volatile economic situation. If Eskom gets its way, consumers could see themselves paying 16.6% more for electricity by April as the power utility tries to recover R22.8-billion in additional costs incurred in the 2013-2014 financial year. This translates to an additional 8.6% increase on top of the 8% agreed upon two years ago. The Nelson Mandela Bay Business Chamber accused Eskom of making South Africans pay for its inefficiencies. Spokeswoman Cindy Preller said the chamber “simply cannot accept the raising of tariffs by nearly 17% by April this year, instead of the 8% already agreed upon”. “Citizens and businesses cannot afford increases beyond the original agreement.

“Once granted, this application would not be in the interest of an enabling environment for business to be globally competitive – particularly in the current economic climate,” Preller said. “Business simply cannot absorb the effects of this RCA [regulatory clearing account] application, which we believe is to recover inefficiencies in maintenance and planning by Eskom. “Against the background of a crippling drought, political instability and the depreciation of the rand, we propose that tariffs must, in fact, be contained and minimised to accommodate businesses, which find themselves under immense strain, to counter the downturn by stimulating growth and employment.” In Cape Town, where the first hearing was held yesterday, Eskom officials were taken to task by the National Energy Regulator of SA (Nersa) on whether the utility had thoroughly considered the economic impact. Nersa also asked whether Eskom’s extensive use of diesel-powered open cycle gas turbines was entirely prudent and why their use deviated so wildly from what Eskom had budgeted for in its original price application. Replying to the questions, Eskom corporate specialist Theresa Smith said the power utility’s overriding concern was to keep the system stable‚ and perfect planning was difficult as decisions had to be made in the moment. While it might not seem economical to use turbines‚ the cost of load-shedding was far greater to the economy‚ Smith said. The use of the turbines cost Eskom an extra R8-billion during 2013-2014 fiscal year.