Business warns of power hike ‘vicious cycle’, amid weak demand outlook

February 5, 2016

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Business warned on Friday that South Africa risked entering a “vicious cycle” of ever-increasing yearly electricity hikes, beyond those already approved, owing to the nature of the current tariff-setting formula, which allows Eskom to recover variances in revenue arising when power sales are below that approved in a given multiyear price determination (MYPD) period. In its Regulatory Clearing Account (RCA) submission, Eskom is seeking to recoup R11.7-billion in revenue variances for the 2013/14 financial year alone, making it the largest single component of the R22.8-billion claw-back application. The second-largest claim relates to its use of R8-billion more in diesel that the R2.5-billion sanctioned for the year.

Category: General