Public hearings on Eskom tariff hike today

Last month, it emerged that Eskom had applied for the increase for the current financial year and that it intended applying for another price rise later in the year to cover the balance of its three-year pricing model.

The application raised the ire of civil society and labour, with the Congress of South African Trade Unions (Cosatu) urging Nersa to reject the parastatal's application.

The union federation said such a price hike would hit workers hard and "inflict misery" on poor households. It cautioned that small businesses, already buckling under the weight of the global financial crisis, would also take a knock if the steep increase was approved.

Cosatu has not ruled out mass action, should the application go in Eskom's favour. Also noting the perilous situation consumers found themselves in due to the financial meltdown, the National Consumer Forum (NCF) echoed the call to reject the application.

The NCF said it would urge Nersa to limit any Eskom increase to within the bounds of the inflation rate. Nersa invited public comments on Eskom's application, with the deadline for written submissions on 2 June, and oral representations to be made on 8 and 9 June. Nersa intends making a decision on the request on 25 June.

The hike would be an "interim" move pending finalisation of the funding model for Eskom's capital expansion programme, the parastatal said.

The increase was needed to "maintain a healthy cash flow situation in the short-term while allowing an opportunity for the funding model to be finalised."

The model sought to "balance the need for equity injection from the shareholder (government), borrowings from investors, and tariff increases."

Earthlife Africa Johannesburg on Friday said it planned to protest outside Monday's public hearings at the Council for Scientific and Industrial Research convention centre in Pretoria.

In a written submission on the matter, Earthlife called for Eskom's long-term funding plan to be presented to Nersa and the public before tariff increases were granted, that it disclose its long-term supply contracts with energy-intensive users such as BHP Billiton and that the state, Eskom's owners, provide a "meaningful and decent free basic allocation of electricity" before the tariff increase.

Source: Sapa

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