The National Energy Regulator is considering Eskom's application for a 53 percent increase in electricity tariffs.

Bruce Whitfield:
Let?s talk to Thembani Bukula, who is a regulator member responsible for electricity at the National Energy Regulator of South Africa. And Thembani, are you seriously considering the request from Eskom to increase prices by 53 percent?

Thembani Bukula:
Well, Eskom has submitted the application to us and by law, we have to consider an application that is submitted by the regulated entity.

Bruce Whitfield:
But you have already given an increase of 14.2 percent, they made an earlier application for something like 18 percent, you said no, that is too high and you gave them 14.2. Can they at any moment make an additional request for that to be adjusted?

Thembani Bukula:
According to the legislation that we have right now nothing prevents them from coming to say that according to their estimates and their operating conditions, these changes have happened and as a result they would want us to reconsider. Nothing prevents them from doing that in the legislation that governs electricity regulation in South Africa.

Bruce Whitfield:
And your obligation then as Nersa is each and every single request it makes, you are obliged to consider fully.

Thembani Bukula:
Yes, we will consider fully and make a decision whether to grant them what they request or not to grant them what they request or to grant them part of what they request.

Bruce Whitfield:
What is the process then? How long does this take?

Thembani Bukula:
I would want to estimate as much as the urgency that has been put around this but I would want to estimate that the process will take around three months because from this application we are now going to complete or compile a consultation paper which we will send to the public for the public to comment and we will take those views and then compile a position paper which we will then get the public to also look at and have a public hearing where we would get all of the views and the facts and the evidence from the different people before we make the decision.

Bruce Whitfield:
Is this a little bit like the trade union negotiations; I come in, I aim high knowing you're not going to give me that but I know that you're not going to give me what I want so I go high and hopefully you undershoot but I still come out better off than if I had a reasonable request in the first place?

Thembani Bukula:
I wouldn't call it like that because I think we have an expectation that the regulated entity should be reasonable around the things that it requests the regulator to look at, so I wouldn't call it like that. But having said that I don't think that there are measures that we have in place that prevent them from over-aiming, wanting to achieve less than that.

Bruce Whitfield:
Do you think that the regulator has been reasonable to date, granting that 14.2 percent?

Thembani Bukula:
I think, based on the information that was given to us, we consider it reasonable and prudent and efficient for the electricity supply industry to sort of, grant a 14.2 percent increase if we want it to be sustainable in the long term.

Bruce Whitfield:
But you accept that circumstances may have changed in the interim.

Thembani Bukula:
Yes, the two reasons that Eskom has given for the changes in circumstances or the things that have changed is, one, that their primary energy costs, which is the cost of coal and the other fuels that they use have increased at rates that are higher than the ones they had anticipated. The second reason that has been given is that for them to implement the demand side management and power conservation programmes they need additional funds to do that, hence this increase.

Bruce Whitfield:
Thembani Bukula, thanks very much indeed, he is from the National Energy Regulator of South Africa.