Comments on: Finally, something newsworthy on Eskom and electricity prices

By: David Kirk

David Kirk — Fri, 01 Mar 2013 22:15:02 +0000

In reply to Andrew. Sure, and there's plenty of analysis on that story alone to do, but that doesn't change the fact that inflation isn't the reason not to increase the rates. It does raise the real questions of the actual cost of producing electricity, separating that from what is charged and the methods of financing capital programmes. NERSA may actually have a clue, but the typical journalist (and unfortunately citizen) doesn't think in those terms. "More pay bad."

By: Andrew

Andrew — Fri, 01 Mar 2013 15:39:20 +0000

The reason that NERSA gave on why they only gave 8% (well the bit I heard on the radio this morning) was very plausible. Eskom wanted to bolster its balance sheet so that it could raise its own capital independent of the government credit rating. But since Eskom is 100% owned by Gvt, the balance sheet is Gvt’s anyway. So why do they need to build up reserves at the expense of the electricity consumers? NERSA said “No”.