Picture: THINKSTOCK
Picture: THINKSTOCK

ESKOM wants tariffs to go up 25.3% from July 1 — double the expected hike — and plans to ask the National Energy Regulator of SA to process a new application.

Tariffs were expected to go up 12,69% in 2015-16, but Eskom had asked for an additional increase to help pay for the cost of diesel to run its open-cycle gas turbines, which have kept the lights on and reduced load shedding for the past year. It also wants to raise additional revenue to continue to pay independent power producers, whose contracts with it expire at the end of this month.

The government’s "war room" — a team made up of several Cabinet ministers and top officials — is behind the rush decision to apply for a "tariff reopener". Eskom and the Treasury said as recently as last month that the company would not apply for a reopener, but would continue to attempt to claw back costs via the revenue clearing account.

In its application to the Treasury and the South African Local Government Association (Salga) — which it must consult — Eskom listed delays with Medupi, Kusile and Ingula and the poor performance of the generating plant as the rationale for the reopener.

The higher tariff will cause havoc with municipal budgets, which were supposed to have been finalised by March 15.

Eskom has appealed to Finance Minister Nhlanhla Nene to extend the approval period.

In a letter to Salga, Eskom also appeals for co-operation from municipalities to expedite the consultation process.

Cape Town deputy mayor Ian Neilson said the city was due to table its budget next week and it was now in the difficult position of having to tell customers that tariff hikes would be much steeper than expected.