Eskom’s underperformance does not justify a tariff increase

19 September 2022

While South Africa is suffering under stage 6 of rolling blackouts, Eskom is demanding that consumers pay a third more for electricity. AfriForum opposes this application and participated in the National Energy Regulator of South Africa’s (NERSA) written process.

AfriForum submitted their written comments regarding the electricity increase requested by Eskom for the 2023/2024 and 2024/2025 financial years to Nersa. The civil rights organisation argues that Eskom is still plagued by a lack of careful expenditure management, procurement management and maladministration. These costs must be excluded when calculating the increase in the coming year’s electricity tariff. Eskom submitted an application for an increase of 32.66% in the 2023/2024 financial year.

“If you look at Eskom’s performance and the main consideration of Nersa is whether Eskom is ‘prudent’ in the delivery of electricity, they cannot ask consumers to pay a third more for electricity. Nersa has the mandate to protect the consumer. Only prudent expenses can be recovered from consumers and this means that Nersa cannot ignore the fact that Eskom is still facing a procurement crisis after many years of audits that point out the problem. Nersa cannot allow the tariff to continue to rise at the rate it has climbed in the last decade,” says Morné Mostert, AfriForum’s Manager of Local Government Affairs.

AfriForum is of the opinion that ordinary individuals, businesspeople and community organisations can add generating capacity to the network much faster and more effectively. This was part of Cyril Ramaphosa’s speech regarding the power crisis. The obligation now rests with Nersa to draw up and implement rules for this practice.

“It is clear that the solution cannot be left in the state’s hands. Private individuals should be able to look into supplementing the power shortage. We do know that Eskom wants to fine people with this ability, but AfriForum will also question and fight this process,” concludes Mostert.

AfriForum will make a presentation to Nersa about the tariff increase.

Issued by Morné Mostert, Manager: Local Government, AfriForum, 19 September 2022