UPDATE 3-S.Africa power firm agrees to phase in price rise

(Recasts with end of summit, adds minister comment, details)

By Paul Simao

JOHANNESBURG, May 16 (Reuters) - South Africa's state power firm, under pressure from the ruling ANC party, agreed on Friday to phase in electricity price rises over five years instead of pushing for a sharp hike to address a dire power crisis.

Eskom, which produces about 95 percent of South Africa's electricity, provoked public anger when it asked for a revised 53-percent tariff increase. The African National Congress and union allies said that would hurt the poor and stoke inflation.

Regulators had approved an increase for Eskom [ESCJ.UL] of just over 14 percent for 2008/09.

Power cuts in January forced large gold and platinum mines to shut down for five days, pushing world precious metal prices higher. The mines are now operating at 90 to 95 percent of their normal electricity supply.

"We agree on the need for price increases and that they should be smoothed out," Public Enterprises Minister Alec Erwin said at the end of an energy summit in Johannesburg that drew top officials from Eskom, government, the ANC and labour.

"It's going to be done over a five-year time period," Erwin said, adding that the price hikes, when approved by regulators, would be a shock for the economy.

Erwin was among a number of ministers in President Thabo Mbeki's cabinet who initially supported the utility's electricity price proposal as necessary to fund a 350 billion rand ($46.4 billion) infrastructure expansion.