South Africa's energy regulator rejects electricity tariff hike

South Africa's National Energy Regulator (NERSA) on Monday rejected an application submitted by national electricity utility Eskom to increase electricity tariff by 25.3 percent for 2015/16.

This came amid a worsening energy crisis that has led to more frequent power outages.

NERSA made the decision based on the information and performed analysis after assessing power utility Eskom's application, NERSA Chairman Jacob Modise said in Pretoria.

Eskom's plan has met with strong opposition since it was submitted in late April. Opponents say the plan would have a terrible impact on the economy and job creation at a time when power outages become more and more frequent.

NERSA has found the application did not comply with the requirements of the Municipal Finance Management Act and Municipal System Act, in that less than 40 days were given to the National Treasury and South African Local Government Association (SALGA) for comments, said Modise.

NERSA held a public hearing last week on Eskom's application.

Modise said about 30 presentations were made during the hearing by small users, intensive users, civil society organizations, political organizations, trade unions, environmental activists and private individuals.

Following issues raised at the hearing, Eskom's price increases would result in company closure, job losses, and loss of essential skills and capacity in the economy, according to Modise.

The door is not closed to Eskom, it can submit a detailed application, he said.

Acting Eskom CEO Brian Molefe said recently that South Africans have to either chose electricity tariff hikes or load shedding.

Molefe promised last month that the winter would be free of load shedding. Regardless of this assurance, millions of South Africans have found themselves sitting in the cold and dark.

Eskom implements load shedding as a last resort to protect the national system from a total blackout which would have significant impact on the economic development of South Africa.

The electricity crisis has already cost the economy heavily and resulted in countless job-losses.