Eskom hike runs into fierce opposition

24 June 2015 - 02:36 By Kingdom Mabuza

Eskom's application to the National Energy Regulator for a massive increase in electricity tariffs appears doomed. Eskom, which was granted a 12.7% increase in April, wants a further 12.6%.Several organisations said granting such an increase would be improper and unwise.The deputy mayor of Cape Town, Ian Neilson, said: "There is no mechanism in legislation to approve a change in tariffs between the approval date of the budget (end of May 2015) and the implementation date of the budget (July 1 2015)."Eskom's acting CEO, Brian Molefe, said the higher tariffs were needed to minimise load-shedding and stabilise the national supply system.Eskom's credit-rating was downgraded to junk status in March by ratings agency Standard & Poor's.The ferrochrome industry faces the closure of smelters and up to 200000 job losses due to higher electricity prices, Ferro-Alloys Producers' Association representative Jacobus Zaayman said.The head of economics at the Chamber of Mines of SA, Monique Mathys, said: "An increase will severely jeopardise the sustainability of the mining industry."The mining industry is at a tipping point."Christopher Yelland, managing director of EE Publishers, said: "Municipalities have formal, consultative, budgeting processes governed by the Municipal Finance Management Act."[An electricity tariff increase] has obviously not been included in their budgets and tariffs for their financial year commencing July 1."This means that any further price increase cannot be passed on by municipalities to their own electricity customers."..

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