Eskom 'strangling business'

18 June 2015 - 02:02 By Penwell Dlamini

Big business has warned Eskom that it is squeezing the life out of the economy. The state-owned power utility's biggest customers say they have been hit by electricity price increases of more than 70% in the past five years - and they are buckling under the strain.The Energy Intensive User Group , which represents this country's biggest energy users, said annual average tariffs increased by 70.18% between 2010 and 2011 and 2014 and 2015.The group says that the projected cumulative increase in the average tariff between 2010 and 2011 and 2017 and 2018 will reach 123.72%, inflicting severe constraints on economic growth ."These significant increases, and as well as the inability of Eskom to provide a reliable electricity supply, place pressure on the economy and make industry uncompetitive," the user group said in its submission to the National Energy Regulator of SA.Eskom has asked the regulator to increase the electricity prices by a further 12.61% for the financial year from April 1 to March 2016 on top of the 12.6% already approved."Comprehensive submissions were presented on the significant impact the proposed increase would have on individual companies and the economy. This application will further weaken the economy as a whole and the viability of firms in particular," the group submitted.The group wants Eskom's current application to be denied.Eskom acting CEO Brian Molefe told journalists in Johannesburg yesterday that the company needed about R10.5-billion to run its open-cycle gas turbines and a further R5.3-billion for short-term power purchase agreements."If South Africa is not prepared to put forward an additional R15-billion, and we have to load-shed as a result, the cost to the economy will be much bigger than R15-billion," Molefe said...

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