ESKOM - National Energy Regulator must report to Parliament

26 June 2014

Today, I will write to the Chairperson of the Portfolio Committee on Energy, Fikile Majola, requesting that the National Energy Regulator of South Africa (NERSA) be called to Parliament to provide an independent report on the financial and operational state of Eskom. 

This comes as NERSA, which is responsible for the regulation of the electricity, piped-gas and petroleum pipeline industries, engages in a retrospective review of Eskom's tariffs for the previous financial year; which may result in higher electricity prices for South Africans. 

Facing high inflation, the highest in five years, a contracting economy and high unemployment, a rise in electricity prices would punish the poorest of South Africans for Eskom's own inefficiencies and further hamper the creation of jobs by increasing production costs for businesses. 

Cash-strapped Eskom cannot be rewarded for its bad financial management at the cost of the consumer nor should the government coffers be used to stabilise its balance books. 

Poor management at the state utility massively delayed delivery of Eskom's Medupi and Kusile megapower projects, which has prolonged Eskom's costly over reliance on the more expensive open-cycle gas turbines.

Compounding Eskom's financial failures, is its inability to provide stable power generation - throwing businesses and South African homes into darkness due to rolling blackouts.

As the energy sector oversight body and given the current power crisis, NERSA must brief Parliament specifically on:

Governance practices at Eskom and how those have impacted on performance;

The status of management practices at Medupi and Kusile power projects;

The functioning of Eskom's power generating facilities, specifically, the number of unplanned outages, their causes and how those have been addressed; and

NERSA's review of the Eskom's tariffs.  

Parliament, as government oversight body, must actively participate in the reform of the energy sector so as to ensure stable power for South Africans.  

This can be done through the passing of the Independent Services an Market Operators (ISMO) Bill which will end Eskom's monopoly by creating a Transmission Service Operator who owns the grid and is entrusted with energy modelling and procurement of energy from both Eskom and independent power producers. 

The DA will continue to fight to keep South Africa's lights on.

Statement issued by Lance Greyling, DA Shadow Minister of Energy, June 26 2014

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