ESKOM, the state-owned electricity utility, is to apply for a five-year price determination rather than the three-year limits of the prior two multiyear determinations.

The third price determination will set out electricity prices for the period from April 1 2013, when the second determination expires.

A five-year price determination would "ensure a predictable, longer-term price path for customers, investors and the country", Eskom said on Friday.

While Eskom has not given any indication of the kind of increase it will request, it has indicated steep increases will continue to be necessary to fund its large infrastructure build programme.

This week, the utility submitted a draft of its proposed price determination application to the South African Local Government Association and the Treasury for comment, as required by the Municipal Financial Management Act.

According to the act, local government and the Treasury must be given 40 days in which to comment on the application, and their input must be taken into account in the final application submitted to the National Energy Regulator of South Africa (Nersa).

The minister of public enterprises must table the Nersa decision in Parliament by March 15 2013.

An extensive programme of public hearings and consultation will precede the decision.

Public Enterprises Minister Malusi Gigaba last week called for coal to be classified as a strategic resource, to protect Eskom from rising prices and deteriorating quality.

Coal is an important cost driver for the utility, which could pass on its high cost to consumers. The government wants Eskom to keep tariff increases at relatively low levels.

Eskom said coal prices were the main driver of the 29,2% rise in its primary energy costs in the year to March.

With Siseko Njobeni

preussh@bdfm.co.za