Electricity prices set to keep on soaring

Business Report 31 October 2012.

Donwald Pressly

ESKOM chief financial officer Paul O’Flaherty told MPs yesterday that it seemed likely that inflation-linked tariff increases for electricity were a long way off, possibly only likely at the end of the 2020s.

Until then increases would be in double digits, well beyond the 3 percent to 6 percent inflation target band, he said.

O’Flaherty appeared before the National Assembly energy portfolio committee during hearings on the multi-year price determination. He noted that the 16 percent sought by the state-owned corporation applied for the next five years…

… This would mean 10 years of higher-than-inflation rises to 2023. After that, O’Flaherty said, “a further five years of 9 percent” increases a year were envisaged. That would take the higher-than-inflation increases to 2028. Only thereafter were inflation-linked increases forecast…

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