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Eskom applies for 20% tariff hike

Nersa kicks off consultation for huge Eskom tariff increase

Energy regulator Nersa has on Thursday opened the consultation process for Eskom’s application for average tariff increase of 19.9% by publishing the application on its website.

If approved, the increase would apply to Eskom’s direct customers from April 1 next year. Eskom wants municipal customers to pay an average of 27.5% more from July 1.

The application is for one year only, after Nersa earlier approved a deviation from its multi-year price determination (MYPD) methodology in the light of uncertainty created by litigation regarding its decision to grant an earlier interim tariff increase.

The litigation has been settled in favour of Eskom and paves the way for Nersa to process two further applications for interim increases Eskom lodged earlier.

Those would be over and above the application Nersa published today.

In its current application for 2018/19 Eskom states that if granted, its allowed revenue would increase by a mere 7%. However the price impact would be much higher due to lower sales.

This means that when the total required revenue is divided by the projected sales volume to get to a unit price, the impact of a rebasing of sales volumes in line with the current lower electricity demand, results in the higher increase of 19.9%.

In terms of the approved methodology Eskom recovers its increased revenue from municipalities over nine months instead of twelve. The reason lies with municipal legislation that allows municipalities to increase tariffs only once a year on July 1, when the municipal financial year starts. The 27.5% increase applied for, for municipalities, reflects that recovery over nine months.

Nersa has invited stakeholders to submit written comments during the next month, whereafter it will hold a series of public hearings

Here is the timetable for the public consultation:

Find the full tariff application here

 

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The previous government grew the economy, created employment opportunities and increased the tax base by mining coal to benefit the citizens. This lead to pollution of the atmosphere.

The current government shrinks the economy, destroys employment opportunities and implodes the tax base by “mining” the businesses and citizens, to benefit those who own the coal. This pollutes the socioeconomic atmosphere in the country.

At first glance the 2 situations seem to be similar, but on closer inspection we will spot a difference.

Somebody needs to tell the cadres at Eskom that maybe they are turning the generators the wrong way. The production process at Eskom is the exact opposite of what it should be, so the process is in reverse. Please guys, the direction in which the turbines turn is important!

If it carries on like this, the economy, the tax base and personal spending will look like the Big Hole at Kimberley, while the Zuptas sit on an ever-increasing mountain of cash. Just check the direction of the turbines please….

Recover the billions stolen, put the guilty in jail, stop the corruption, and we could all enjoy free electricity until the billions returned to where they belong have been depleted. Until then go and sing for your supper somewhere else.

I would have thought that Nersa would have got their act together by now and told Eskom present their financial with full disclosures or their request would not be considered. Then unleash a pack of auditors (reputable ones this time) to go through the numbers, raise questions, get answers and then only consider the request for increased fees. So put the onus on Eskom to provide full disclosures or their request will not be entertained, and, no increases for them until all parties agree as to what realistic tariffs should be

No increases until eksdom privatised with a new non race-related management in place.

The question should be: What percentage DECREASE in the price of electricity will NERSA approve for 2018/19. As Eskom have squandered billions in allocating contracts to their friends and cronies, not to mention their overpaid executive management and board in addition to multimillion rand bonuses paid for no reason, it’s more than apparent that Eskom has an abundance of cash and certainly do not need a tariff increase.

Tariff increases from Eskom compared to Inflation + 2% increase

Year Increase ValuePer Increase Inflation Infl+2% ValuePer Increase
R1,000 Amount R1,000 Amount

1 2008 27,5 R1 275 R275 11,5 13,5 R1 135 R135
2 2009 31,3 R1 674 R399 7,1 9,1 R1 238 R103
3 2010 24,8 R2 089 R415 4,3 6,3 R1 316 R78
4 2011 25,8 R2 628 R539 5,0 7,0 R1 408 R92
5 2012 16,0 R3 049 R421 5,7 7,7 R1 517 R108
6 2013 8,8 R3 317 R268 5,7 7,7 R1 634 R117
7 2014 8,0 R3 582 R265 6,1 8,1 R1 766 R132
8 2015 12,7 R4 037 R455 5,0 7,0 R1 890 R124
9 2016 9,4 R4 417 R380 6,5 9,5 R2 069 R180
10 2017 2,2 R4 514 R97 7,0 R2 214 R145
11 2018 27,5 R5 756 R1241 7,0 R2 369 R155

Eskom after all the increases of the last 10 years and now asking for a 27,5% increase is unjustified. Just compare the increases in the table. Eskom by now should be cash flush. If they require a 27,5% increase then Eskom is in the very same boat with SAA. We are being taken for a ride. I can afford the increase and I am busy transitioning to using GAS and Solar but what about the POOR, How are they going to manage in the future. Just look at the impact of compounding on the initil R1000 of 2007. With the 27,5% increase we will now pay R5756. That is more than 5,75 times the original value of R1000. What a rip off. We have been ripped off.

Please accept apology for the table above!

Tariff increases from Eskom compared to Inflation + 2% increase

Year..Increase.ValuePer.Increase Inflation.Inflation.ValuePer.Incvalue
R1 000..Value……………… + 2%… R1 000…Value

1…….2008….27,5….R1,275..R275………..11,5….13,5…..R1,135..R135
2…….2009….31,3….R1,674..R399…………7,1…..9,1…..R1,238..R103
3…….2010….24,8….R2,089..R415…………4,3…..6,3…..R1,316..R78
4…….2011….25,8….R2,628..R539…………5,0…..7,0…..R1,408..R92
5…….2012….16,0….R3,049..R421…………5,7…..7,7…..R1,517..R108
6…….2013….8,8…..R3,317..R268…………5,7…..7,7…..R1,634..R117
7…….2014….8,0…..R3,582..R265…………6,1…..8,1…..R1,766..R132
8…….2015….12,7….R4,037..R455…………5,0…..7,0…..R1,890..R124
9…….2016….9,4…..R4,417..R380…………6,5…..9,5…..R2,069..R180
10……2017….2,2…..R4,514..R97…………………7,0…..R2,214..R145
11……2018…27,5…..R5,756..R1,241………………7,0…..R2,369..R155

You’ve to be joking. They are intent on killing the economy and the consumer.

STOP MISUSING TAX PAYER MONEY AND PUBLIC FUNDS!

Do these people read newspapers or watch the news?

Clearly not!

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