Trade union federation Cosatu has welcomed the decision by the National Energy Regulator to slash Eskom's tariff request by 50%.
Nersa effectively rejected Eskom's request for a 16% a year tariff hike, announcing today that it had approved an eight percent increase.
Cosatu's Patrick Craven says while they still need to study the fine print in the Nersa announcement, on the face of it, the trade union federation is happy with its decision.
He described it as a victory for the people, giving the level of opposition to the Eskom proposal.
"I think this reflects the power of public opinion. I think it was the intervention of trade unions and civil society at the Nersa hearings and demonstrations and pickets around that country that obliged Nersa to take serious note of opposition and make this apparently substantial reduction," Craven said.
In its announcement today, Nersa said "the average electricity price will increase to 65.51c/Kwh in 2013/14 up to 89.13c/kWh in 2018. The total revenue approved for the five years amounts to R906 553 million."
Nersa chairperson, Cecilia Kuzwayo, said "it is important to indicate that Eskom’s MYPD3 application was received and considered against the backdrop of the continuing global economic recession."
"The economic recession posed a challenge to the achievement of the National Development Plan goals in addressing the triple problems of poverty, inequality and unemployment. The President of the Republic of South Africa put it succinctly," she said.
The National Energy Regulator of South Africa also said that Eskom must ensure that:
3.4.1 The Time-of-Use off-peak to peak demand is adjusted to a ratio of 1:8.
3.4.2 All tariff cross-subsidies (received and paid) must be shown transparently. These subsidies are related to affordability subsidies, low voltage subsidies and historic electrification and network subsidies found in large power urban tariffs.
3.4.3 The Use-of-System charges must be based on the cost per voltage level for all large power customers. Where there are low-voltage subsidies, these must be transparently shown as a low-voltage subsidy charge.
3.4.4 The reliability and service charge covering the cost of providing ancillary services which is currently embedded in the energy charge must be unbundled (i.e. shown separately) for the large power tariffs.
3.4.5 The environmental levy charge must be included into the energy charge component of the tariff and not shown separately.
3.5 Eskom must ensure that alternate tariff options (other than Time-of-Use tariffs) are available to municipalities with a predominantly residential load mix.
