South Africa’s Eskom Seeks Higher Power Fees to Get $3 BillionAna Monteiro
Eskom Holdings SOC Ltd., the utility that provides most of South Africa’s power, has asked the nation’s energy regulator for permission to recoup 38 billion rand ($3 billion) of costs incurred in its 2014 financial year through higher electricity tariffs starting April 1.
“If approved, the outcome of this application is expected to impact the electricity price commencing in 2016-17,” Acting Chairman Ben Ngubane said in the Johannesburg-based company’s annual report, released Tuesday.
The regulator in June rejected a request by Eskom, which is struggling to meet demand in Africa’s most-industrialized economy, to raise prices by as much as 25 percent for the year to March 2016. The additional funds would have been used to buy power from independent producers and for diesel to fuel generators the utility uses to curb scheduled blackouts.
Electricity prices in South Africa have almost quadrupled since 2007, when the country first had power shortages. Scheduled supply cuts, known as load-shedding, have taken place almost once every two days on average this year.
In October, the regulator gave Eskom permission to raise tariffs by an average 13 percent from April 1, 2015, more than the 8 percent initially approved, to help the utility recover 7.8 billion rand of unbudgeted costs for the three years through March 2013. The company had applied to recover 18.4 billion rand.
Eskom has struggled to finance new generating capacity and is battling to meet demand after delays in building new power stations and as aging plants suffer from breakdowns.
Kusile, which will have 4,800 megawatts of capacity, making it Africa’s biggest coal-fired power plant when completed, will be fully operational in 2021, while the 4,764-megawatt Medupi facility will be ready in 2019. Both were to be completed by 2018, the company said in 2012.
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