Joburg rejects Eskom’s demand for a 38% rate increase

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The multi-party government in Johannesburg says it will reject Eskom’s request to the National Energy Regulator of South Africa (NERSA) for a 38.1% increase in electricity tariffs for fiscal year 2023/24.

Department of Environmental and Infrastructure Services (EISD) MMC, Councilor Michael Sun and City Power officials attended the NERSA hearings on behalf of the City of Joburg.

“While we as a city fully realize that Eskom must be financially viable, this must not come at the expense of the people of Johannesburg,” Sun said.

“If Eskom’s proposed application of a 38.1% tariff increase is approved, City Power would have little leeway but to pass the costs on to its customers. This would put even more financial burdens on the people of Johannesburg.”

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The proposed rate hike, which is much higher than current inflation, would have a devastating effect on Johannesburg’s residents and the ailing local economy, further erode business confidence and disrupt the city’s fragile economic recovery.

The local government says it believes Eskom has scope to revise and revise its proposed RAR 55 billion revenue by reducing the increase for fiscal year 2023/24 to at least 18.4%.

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The specific assessment of the expected revenues should be carried out around Eskom’s Independent Power Producer (IPP) programme, electricity imports – in particular from the Cahorra-Basse hydroelectric power station, carbon loading and battery power storage.

“This unrealistic rate hike proposed by Eskom would halt the recovery of business and the economy and negatively impact job creation and the city’s revenues,” Sun said.

He stressed to the NERSA panel that fighting the Eskom power outage is not just about keeping the lights on at home. An astronomical amount of economic activity and productive hours are lost, resulting in a magnitude of financial loss for Africa’s economic center, whose recovery will take many years.

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“Therefore, we request NERSA to limit the increase in Eskom tariffs as proposed, and Eskom should rather be encouraged to have introspection and seek alternative mechanisms to improve efficiency and reduce costs,” said Sun.


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