Public Enterprises Minister Malusi Gigaba says Eskom’s request for a 16% tariff increase from the National Energy Regulator of SA (Nersa) is really necessary. He was speaking at a New Age / SABC breakfast briefing when he said although the power parastatal wished it could have kept its request to a single-digit figure, the double-digit tariff hike request was necessitated by the tough conditions in the economy.
We would have put money on it that it was necessitated by incompetence and fat cats wasting money, but Gigaba insists it’s the ” economic situation” that is “biting” him. “We must balance that with future needs [with] our ability to ensure security of supply of electricity. This 16% [request] could have been … higher had Eskom continued to pursue a three-year Multi-Year Price Determination (MYPD).” With him suggesting it could be higher we suppose he needs us to the thankful for supporting one of the highest electricity price increases in the history of the world.
“We decided to stretch this over five years and said that in the fifth year, we wish to move towards single-digit figures. This is to ensure that we alleviate the burden of having to pay a high figure,” explained Gigaba. Last month, the power parastatal asked Nersa for a total 16% tariff hike, with 13% of the hike going for Eskom’s own needs and the other 3% going to support the introduction of independent power producers (IPPs) under a proposed five-year MYPD.
The current three-year MYPD 2 comes to an end in March 2013. The power parastatal is proposing a five-year determination for MYPD 3, running from 1 April 2013 to 31 March 2018. Not the starting date – and that’s not a joke.
The increase represents a total price increase from the current 61 cents per kilowatt hour in 2012/13 to R1.28 cents per kilowatt hour in 2017/18.
The most expensive electricity in the world is on the Solomon Islands north east of Australia at R7.20 per kilowatt hour.
But they have an excuse – they are in the middle of nowhere. We wonder what our excuse will be if we start knocking on R7 per kilowatt hour.
