Eskom’s request for a 20 percent electricity tariff increase will not be good for the country, the South African Local Government Agency (Salga) believes.
South African power utility, Eskom, said the proposed 20 percent electricity hike was completely justified.
The rating agency cites the increased financial pressure faced by Eskom, and the uncertainty around the extension of the Government Framework Agreement.
Earlier this month, the court ruled that the correct methodology had not been followed by Eskom when it requested an additional tariff increase.
The South Gauteng High Court on Tuesday ruled that the correct methodology had not been followed by Eskom when it requested an additional tariff increase.
The extension, which Eskom requested in May, has been granted until 1 April 2017.
The Organisation Undoing Tax Abuse (Outa) says it will seek an interdict at the High Court in Pretoria to prevent Eskom’s 9.4% electricity price hike.
The Minister expects the increase to have significant implications.
Nersa chairperson Jacob Modise said they have to regulate the industry in a manner that balances the interests of both energy producers on the one hand and consumers on the other.
Nersa in June denied Eskom’s application for a 25% tariff hike.