Semi-permanent loadshedding – NERSA should reject Eskom’s 32% tariff increase application

17 November 2022

The announcement by Eskom’s Chief Operating Officer, Jan Oberholzer, that South Africans should brace themselves for longer daily loadshedding schedules over the next 6 to 12 months, is the clearest admission yet that the country has been placed on an unofficial semi-permanent loadshedding schedule.

With 2022 on course to be the worst loadshedding year on record, the revelation by Oberholzer confirms that 2023 will easily eclipse this years’ record by a significant margin. Based on this new reality, consumers should not be forced to pay Eskom 32% more in tariffs just to stay in the dark.

As NERSA is currently in the process of reviewing Eskom’s 32% tariff application, the DA has taken the decision to submit an unsolicited ‘Eskom change in circumstances’ note to NERSA asking them to reject the entity’s tariff application request. Electricity availability is declining markedly and it would be immoral for NERSA to grant Eskom their tariff application request when they can’t even deliver electricity half the time.

Granting Eskom the requested 32% tariff increase will be tantamount to levying an ‘Eskom Inefficiency Tax’ on consumers – where struggling South Africans are forced to carry the financial cost of Eskom’s failing business model. Consumers have subsidised Eskom’s inefficiency for far too long and any notion that they should pay more into this black hole should be dismissed with contempt.

The only way out of Eskom’s death spiral, as admitted by Eskom CEO Andre de Ruyter and Oberholzer, is to build new generation capacity outside of government and Eskom. Independent energy experts have made projections to the effect that approximately 53 GW of new generation capacity is required by 2032, mainly from renewable energy sources, especially solar and wind, to effectively deal with loadshedding.

If previous bid windows are anything to go by, there is significant interest from energy investors in the private sector to get involved in renewable energy generation. All the government needs to do is to get out of the way and allow them to building a project pipeline of energy projects that would free consumers from Eskom and loadshedding.

In the short term, the energy regulator NERSA should protect consumers from commercial exploitation by Eskom through exorbitant tariff increase requests. By breaking the social contract to supply reliable electricity, Eskom has forfeited the prerogative to demand more money from consumers, who are essentially sitting in the dark on a daily basis.

Issued by Kevin Mileham, DA Shadow Minister of Mineral Resources and Energy, 17 November 2022