By Thapelo Sakoana

Eskom will increase electricity prices by 5.1 percent from 1 April, the National Energy Regulator (NER) has announced.

This final determination of Eskom’s revenue requirements for the next three years follows the NER’s draft determination in December to keep the increase within the inflation rate.

Eskom had proposed a 6.6 percent increase to help maintain its multibillion Rand development programme over the next few years.

Nevertheless, the regulator said it came to this conclusion taking into account issues such as the cost of primary energy, capital investment and working capital requirements.

“We believe that this determination represents a realistic and fair balance towards the realisation of these objectives,” said chairperson Collin Matjila.

However, tariffs charged to municipalities will not increase until 1 July this year.

These will be charged at 6.8 percent, subject to the rules of the Municipal Finance Management Act.

In terms of the multi-year adjustment, there will be an average price increase of 5.9 percent in 2007/8 and 6.2 percent in 2008/9.

Matjila said the increases included assumptions of official and business estimates of general economic indicators and Eskom’s growth.

“Should the actual economic indicators and Eskom grow vary significantly from these assumptions, then the percentages may increase or decrease,” he said.

NER chief executive Smunda Mokoena said they had conducted public hearings and considered submissions from various stakeholders in this regard.

Source: BuaNews