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Electricity Tariff Announcement Delayed as Talks Continue

The announcement by The National Energy Regulator of South Africa on electricity tariffs was delayed, by more than an hour, at the last minute on Thursday afternoon for further talks.

It was unclear what the cause of the delay was.

The briefing was scheduled for 1pm and changed to 2pm. It had not yet started twenty minutes after the revised time.

Eskom applied for electricity increases of 17.1% for 2019/20, 15.4% for 2020/21 and 15.5% for 2021/22.

Most oral and written submissions from business, labour and civil society rejected the double digit tariffs, averaging four times more than the consumer price index of 4% in January.

Nersa has a history of granting the power utility increases below the applied for tariffs.

The energy giant is in under severe financial stress and was granted a R69bn lifeline from National Treasury in February, to undergo restructuring.

Head of Fixed Interest at Cadiz Asset Management Alastair Sellick tweeted that the bond market was on “tenterhooks” on Thursday afternoon due to the announcement being delayed.

The electricity price increase granted to Eskom will play a part in determining its financial position for the next three years. The state owned company is R420bn in the red and currently cannot service its debt from revenue.

Earlier in the day, Eskom announced a high risk of load shedding for the day.

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Written by How South Africa

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