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Nersa allows Eskom to raise tariffs by 9.4 pct in 2016/17

01 March 2016 - 15:34 By Zandi Shabalala

South Africa's energy regulator said on Tuesday it had allowed state-owned power firm Eskom to raise tariffs by 9.4 percent in the 2016/17, less than what had been requested by the cash-strapped utility.

Eskom had in November requested the regulator to allow it to recover 22.8 billion rand ($1.5 billion) in costs from 2013/14 when it ran expensive diesel plants and brought more green power to keep the lights on.

The decision by the National Energy Regulator of South Africa (Nersa) means that Eskom will be allowed to claw back a total of 11.2 billion.

"The energy regulator decided that the average tariff for standard tariff customers be increased by 9.4 pct for the 2016/17 financial year only," the regulator's Chairman Jacob Modise told a media briefing.

"We are giving them half of what they had asked for."

The regulator said that Eskom can recover 1.3 billion rand instead of the requested 8 billion that the utility had used to run its diesel plants.

Eskom, which provides virtually all of South Africa's electricity, is scrambling to repair its ageing power plants and grid. Earlier this year, the utility was forced to impose almost daily power cuts that hurt economic growth.

- Reuters