Eskom Is Essentially Making Consumers Pay for Their Own Inefficiencies, Nersa has approved an 18,65% electricity tariff increase for the 2023/24 financial year.
Eskom is essentially making consumers pay for their own inefficiencies including their failed R350 billion investment in Medupi and Kusile, the R45 billion plus outstanding payments from municipalities, and the rampant theft of electricity.”
This is according to the CEO of the Pietermaritzburg & Midlands Chamber of Business, Melanie Veness, after the National Energy Regulator of South Africa (Nersa) approved an 18,65% electricity tariff increase for the 2023/24 financial year.
The regulator further gave Eskom another 12,74% nod for the 2024/25 financial year, Nersa announced on Thursday.
For Eskom-supplied customers the increase will become effective from April this year and will be determined by the financial year for municipalities.
This comes against the backdrop of the power utility’s application for a 32% tariff hike last year, which would have come into effect this year.
Veness said:
Instead of over-burdening consumers and businesses, who are reeling from the effects of ongoing blackouts, Eskom should rather focus on addressing their own inefficiencies and operating costs, and developing and implementing a feasible rescue plan to get South Africa out of this extremely serious electricity crisis. If we pay 18,65% more, what are we likely to get for that?
It’s simply not tenable for consumers and businesses, who are already under an immense financial strain, to continue to pay more and more for electricity and get less and less electricity, particularly when there is no clear plan in terms of how Eskom will actually get South Africa out of this crippling crisis.
Energy regulator Nersa postponed its decision on this for the next two financial years.
In its initial application for the 32% increase, Eskom had said a number of factors had informed such a high application.
These factors included the cost to produce electricity from independent power producers and the increased diesel and fuel oil prices which are used for Eskom’s open-cycle gas turbines, among others.
Nersa further approved revenues of R318 billion for the 2023/4 financial year and R352 billion for the 2024/5 financial year.
Responding to a question on what happens if Eskom doesn’t meet the energy production targets, panelist Nhlanhla Gumede said the regulator is caught “between a rock and a hard place”.
It will be irresponsible for the power utility to say the plants are not working. These plants need to come back online.
If Eskom fails to run the plants, then it should be capable of correcting the problems they are facing. Eskom has to stick to the targets on losses, meaning now the utility has to drop unplanned capacity loss to 20% in 2023/24 and 18% in 2024/25. This is non-negotiable.
Nersa chief executive officer, Nomalanga Sithole said:
The decision was also taken against the backdrop of a number of factors including low economic growth, the fiscal deficit, and the decline in public/private sector investments. This decision has also been checked against the legality and rationality principles.
Energy expert Chris Yelland said Nersa does not seem to know what they are talking about when it came to dealing with Eskom.
On the non-negotiables, Yelland pressed for an explanation of what it meant for a 72% energy availability factor for 2023/24.
“When I pressed for an explanation they became vague. The fact is that the energy availability factor has been on a downward spiral for the past five years. The 72% energy availability is misleading the public,” said Yelland.
Eskom spokesperson Sikonathi Mantshantsha said the power utility will release a statement on Friday regarding the Nersa decision on electricity prices.
Source: TheWitness
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