Back to the drawing board for Eskom’s proposed tariff hike

Eskom will have to reconsider its financial options after the National Energy Regulator of South Africa (Nersa) rejected the utility’s application for a 25.3 percent tariff increase on Monday.

(Also read our article: More darkness, now that Eskom failed to get 25%?)

Eskom had requested a further 12.61% increase, after it was awarded a 12.69% tariff increase from 1 April this year.

After detailing the shortcomings in Eskom’s selective reopener application, Nersa’s Chairperson Jacob Modise said that Eskom must submit a proper application which is consistent with the Constitution of South Africa and the Municipal Finance Management Act.

A difficult balancing act

CapeTalk host Kieno Kammies spoke with Thembani Bukula, regulator member at Nersa, about why the application was denied and the likelihood of a re-application.

Bukula says that the function of Nersa requires a delicate balance between the different interest groups.

We consider the requirements of our customers, domestic business, investors and the utility itself. We have to balance the decision against its sustainability. In this application we looked at other legal requirements.

Thembani Bukula, regulator member at Nersa

He says that even if Nersa had granted the proposed increase, municipalities would not have been able to implement it because of budgeting regulations within the Municipal Finance Management Act. If Eskom re-applies, the submission would only affect the changes in the 2016/2017 financial year.

Listen to the full conversation with Thembani Bukula on CapeTalk's Breakfast with Kieno Kammies:

Raising a red flag

702 presenter John Robbie spoke with project director at the Energy Intensive User Group of Southern Africa (EIUG), Shaun Nel, who says that the decision by Nersa is a testimony to its impartiality.

I think we’ve had confidence in the independence of the regulator. We had a sense that the nature of the application would raise some concerns for Nersa, which is one of the primary reasons why it was rejected.

Shaun Nel, project director at EIUG

Nel says that the application itself was irregular and that the revenue allocations that it applied for, was because it was unable to maintain transparency about the production of electricity at the utility.

Listen to the full conversation with Shaun Nel on 702's John Robbie Show:

Read More
2009: Bruce Whitfield recalls the financial crisis

2009: Bruce Whitfield recalls the financial crisis

As we look back on 20 years of CapeTalk, The Money Show's Bruce Whitfield recalls the events that shook the financial system across the globe.

WC Soc Dev dismisses claims of dragging feet in child abuse cases

WC Soc Dev dismisses claims of dragging feet in child abuse cases

Listen to MEC Albert Fritz outlining some of the challenges social workers go through when intervening in child abuse cases.

LISTEN: Zuma uses the ANC - Solly Mapaila

LISTEN: Zuma uses the ANC - Solly Mapaila

SACP's Solly Mapaila says it is concerning how Zuma acts with impunity, disregarding the alliance and the party.

LISTEN: New SABC deputy chair says state capture, corruption will be aired

LISTEN: New SABC deputy chair says state capture, corruption will be aired

Deputy chairperson of SABC Board, Febe Potgieter-Gqubule explains the board's mandate in restoring confidence in the broadcaster.

Intellectually challenged Donna Chait defies the odds

Intellectually challenged Donna Chait defies the odds

A soon to be released SA documentary tells the story of this intellectually challenged woman who ran the New York Marathon.

More darkness, now that Eskom failed to get 25%? An energy expert discusses...

More darkness, now that Eskom failed to get 25%? An energy expert discusses...

Eskom will have to make do with a 12 percent tariff hike. Famed energy expert Chris Yelland on the impact of this development...

Popular articles
Hassen Adams (he brought Burger King and Dunkin’ Donuts to SA) talks money

Hassen Adams (he brought Burger King and Dunkin’ Donuts to SA) talks money

The Money Show’s Bruce Whitfield interviews Adams about his attitude to money (hopes and fears, successes and failures, etc.).

Eusebius Opinion: "Let go Kevin Pietersen, you do not own the school"

Eusebius Opinion: "Let go Kevin Pietersen, you do not own the school"

McKaiser responds to former SA, now England cricketer Pietersen's comments over Maritzburg College pupils holding EFF t-shirts.

Twitter is gobsmacked as Nigeria honours Jacob Zuma with bronze statue and road

Twitter is gobsmacked as Nigeria honours Jacob Zuma with bronze statue and road

During Zuma's visit to Nigeria, the Governor of the Imo State in Nigeria, Mr Owelle Okorocha, conferred an Imo Merit Award on him.

Minister Lynne Brown's partner scored R1.2 million contracts with Eskom

Minister Lynne Brown's partner scored R1.2 million contracts with Eskom

Sikonathi Mantshantsha says this revelation explains why Brown was reluctant to take any action against Eskom executives.

KZN school ordered to stop action against students with EFF shirts

KZN school ordered to stop action against students with EFF shirts

A letter has been addressed to the Maritzburg College principal after an image of the boys went viral last week.

Kloof Street residents living in fear as crime multiplies

Kloof Street residents living in fear as crime multiplies

A Cape Town man was stabbed to death on Saturday while trying to assist two women who were being mugged on Kloof street.

‘I started my thriving business with R5000 (and made a profit in the 1st month)’

‘I started my thriving business with R5000 (and made a profit in the 1st month)’

After 3 years there are 3 Nic Harry stores (incl online) that sell 100 000 pairs of socks in over 20 countries around the world.