* Power rate cut from original hike of 25.9 pct
* Eskom asked by govt to reduce hikes to protect consumers
(Adds detail, background)
By Agnieszka Flak
JOHANNESBURG, March 9 (Reuters) – South Africa’s
energy regulator said on Friday it had cut the increase in
electricity rates for power utility Eskom to 16 percent for the
2012/13 financial year from a previously approved hike of 25.9
percent.
The decision follows Eskom’s application to reduce the hike
after the utility had been asked by the government to ease up on
private and industrial consumers, who have been hit in recent
years with soaring power costs.
Energy-intensive users, including South Africa’s vital
mining industry, have long said that the steep increases were
making some of their operations unsustainable.
Cash-strapped Eskom has been struggling to raise the money
it needs to build power plants fast to avoid a repeat of a
crisis that forced mines to shut for days in 2008 and cost
Africa’s biggest economy billions of dollars in lost output.
The reduction will result in a loss of revenue of 11.15
billion rand ($1.48 billion), the regulator said.
Eskom, once one of the world’s lowest-cost electricity
producers, was granted in 2010 three years of 25 percent annual
rises in power tariffs and was expected to apply for two more
similar increases after that.
Continued…
