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Eskom calls on national regulator to consider its application

by Luyanda Makapela
on 25 May 2008
BuaNews Online
BuaNews Online

Eskom needs to have a new tariff structure which will recognise the importance of the affordability with regards to the poor, as well as enable the state utility to increase its electricity capacity.

Speaking during the public hearings which were held on the proposed 53 percent electricity price hike on Friday, Eskom Chief Executive Officer Jacob Maroga said the poor should be kept in mind during this process.

However, he said there was a great need for the increase in tariffs to go beyond the required norm while ageing electricity plants were running longer and harder than they were designed for.

"The nature of this challenge and the extent to which Eskom has to perform its duties adequately is of concern at this stage," he said.

Tabling Eskom's electricity price application before the National Energy Regulator of South Africa's (Nersa) five member panel, Eskom's Non-Executive Chairman Valli Moosa described the situation currently facing the power utility as extraordinary.

"It is important to note that notwithstanding all these hiccups, the challenge of not having enough megawatts is a real problem," he said.

Mr Moosa added that prices needed to reflect services provided to customers including fuel and capital.

"We need a tariff structure that will recognise the importance of affordability to the poor," said Mr Moosa.

He further highlighted that the power utility has already overspent its budget and sometimes took risks as it had no option.

Eskom's Financial Director Bongani Nqwababa said his company would be facing significant challenges in 2008, 2009 and beyond.

"This has been fuelled by extraordinary increase in fuel cost and based on 14.2 percent hike we will be facing a loss of R7.9 billion this financial year," Mr Nqwababa said.

The public hearings will continue on the 27 May, where other concerned stakeholders are expected to oppose the proposed electricity hikes. - BuaNews

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