South Africa: Eskom Wants to Lift Power Tariffs by 43% Next Year

(Bloomberg) — Eskom Holdings Ltd., South Africa’s state-run power utility, wants to raise prices 43 percent next year as it bids to double tariffs by April 2009 to pay for more expensive coal and fund expansion.

The utility will “barely break even” in the year ended March 31 and could post a “significant” loss this year as coal climbs, Eskom said in a price application published on the National Energy Regulator of South Africa’s Web site today. Eskom’s net income rose 39 percent to 6.45 billion rand ($828 million) last year.


“Unless Nersa permits Eskom to increase tariffs quite substantially, Eskom will most likely be unable to meet some of its repayment obligations,” the Johannesburg-based utility said, citing a legal adviser.

Eskom has applied to lift tariffs by 61 percent starting April 1 to cover higher fuel costs and pay for programs to curb power use. While the utility wants customers to reduce consumption in a bid to ease an electricity shortage that has blacked out cities and halted mines and smelters, the price increase threatens to boost inflation and interest rates.

Bloomberg