NERSA tariff decisions will hurt farmers

Agri SA is concerned about the recent NERSA tariff decisions. Any electricity price increase will have a negative impact on agriculture, especially in the context of the prevailing drought conditions and limited economic growth.

NERSA has approved electricity hikes (MYPD 4) of 9.41%, 8.1% and 5.2% for the next three financial years - below Eskom’s application for double-digit tariff increases. For the MYPD3 RCA application, NERSA approved R3,869 billion versus the R21,6 billion Eskom applied for.

“Whilst we are concerned about Eskom’s financial viability and realise that tariff increases may be necessary for Eskom to keep the lights on, this burden should not be passed onto consumers, especially not agriculture,” says Nicol Jansen, Agri SA Chairman: Economics and Trade Centre of Excellence.

Agri SA followed the official channels, by submitting written commentary and presenting at NERSA’s public hearings. We highlighted the importance of agriculture, especially irrigation agriculture, and the negative impact that tariff increases will have on the sector. We also emphasised that any potential tariff increase should only be on electricity and not line fees. Agri SA is in the process of securing a meeting with NERSA to resolve this aspect.

In addition, Agri SA continues its efforts to facilitate the use of solar power generation in agriculture by removing the regulatory and administrative constraints that curtail further investment.

Statement issued by Nicol Jansen, Agri SA Chairman: Economics and Trade Centre of Excellence, 8 March 2019