South African power utility, Eskom, said the proposed 20 percent electricity hike was completely justified.
This week Eskom applied to the National Energy Regulator of South Africa (Nersa), for the increase to be implemented during the next financial year. The next port of call, though, will be public consultation and that will likely encounter considerable resistance.
The challenge, for government, will be to convince the public that the increase is necessary and just.
Eskom says its proposed tariff hike covers expenses that include purchase of renewable energy, environmental levies and operational costs.
Speaking about the proposed increase this week, Eskom spokesperson Khulu Phasiwe said: “About R35-billion of that amount is actually for purchase of energy from renewable energy projects and then there is also the amount of R8-billion, which is a tax or a levy, called an environmental levy.”
A trust deficit has been created by Eskom under this administration, with clean governance or the lack thereof coming under the spotlight. That has been compounded by a dysfunctional board, which failed to convince the public that it had been efficient during its term in office.
However, Phasiwe said the proposed price changes were legitimate, adding that there had been nothing untoward about them.
“In other words that money goes directly to the national treasury. We are collecting on behalf of the fiscals, and the other amounts are for our operational requirements, because we still have to operate as a business,” added Phasiwe.