PRETORIA – The City of Joburg has welcomed the welcomed the lower-than-expected Eskom tariff increase of 9.61% announced by the National Energy Regulator of South Africa (Nersa).
Eskom had applied for an annual average tariff increase of 20.5% for the financial year April 1, 2022, to March 31, 2023.
City of Joburg’s MMC for Environment Infrastructure Services Department Michael Sun said the increased approved by Nersa is a “mild victory”.
“This is a mild victory for us and our residents who are still struggling to make ends meet due to the economic conditions after lockdown. We believe that limited increase to Eskom is not just good news for City Power but also its customers as it would enable City Power to transfer the benefit to our customers,” Sun said.
“The decision is in line with our expectations based on our assessment of the application and the submission the executive mayor, councillor Mpho Phalatse made on behalf of the multi-party government to Nersa during the hearings in January.”
He said by limiting the increase to 9.61%, Nersa reduced Eskom’s revenue application by R26.531 billion, almost half of what it had requested.
“We believe the decision is prudent and will not necessarily be to the financial detriment of Eskom,” Sun said.
The limitations Nersa imposed on Eskom include its application for purchases of electricity from independent power producers by R9.533bn as Nersa is of the view that some of the independent power producers projects will not achieve commercial operation during financial year 2022/23. Eskom will therefore only need the funds during the next financial year.
Sun acknowledged that although the tariff increase is “still deep for our struggling customers”, it is better than the “exorbitant” 20.5% initially requested by Eskom.
“The executive mayor, councillor Phalatse made it clear during our submission at Nersa on the 21 January 2022, that our residents should not be made to pay for mismanagement and lack of planning at Eskom,” Sun said.
“The City of Joburg is working hard to cut the over-reliance on Eskom which has proven to be incapable considering the bouts of load shedding our residents had to endure.”
Last year, Eskom revealed an ambitious plan which will see it invest more than R170bn over the next decade in new capacity expansion projects for transmission of electricity.
The struggling power utility shared in October, its transmission development plan for the period 2022 to 2031 with various stakeholders as part of its licence requirements issued by the energy regulator.
South Africa’s economy has been dealt a blow by Eskom's crippling power blackouts since 2007 due to breakdowns at its ageing, coal-fired power plants, and the maintenance programme currently under way. The power utility has also had its infrastructure damaged due to vandalism, theft and tampering.
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