NERSA’s ineptitude contributing to escalating cost of electricity tariffs

17 February 2021

The decision of the National Energy Regulator (NERSA) to award Eskom a 15% increase on its bulk tariffs is a slap in the face of the people of South Africa, especially in light of the Covid pandemic and its impact on peoples’ ability to earn a living or pay their bills.

It is a fact (proven in several recent court cases) that NERSA has demonstrated its incompetence in determining electricity tariffs that are accurate and cost reflective – and much more must be done to ensure that the regulator has the required skills to perform this task effectively in the future. In this instance, however, NERSA has essentially rolled over and accepted what Eskom demanded.

The reality is that South African residents are being expected to pick up the tab for government failures to reform electricity generation, transmission and distribution and to better regulate the sector. Instead of opening up our electricity supply to competition, the ANC and NERSA have shored up the monopoly controlling electricity generation in South Africa for the past 25 years. Instead of making it easier for new entrants to provide power (and incidentally, ease the burden of loadshedding), the ANC and NERSA have made it increasingly burdensome and bureaucratic, and place ever more obstacles in the path of true competition.

The only way to reduce the cost of electricity over the long term is to increase competition. It’s also the only way to ensure that our generation capacity is built up.

The Democratic Alliance will continue to fight for the liberalization of our electricity generation sector, and for electricity pricing that is fair to consumers and encourages economic growth. Later this year, the Party will be reintroducing its “Cheaper Electricity Bill” in order to drive the costs of power down.

We will also be pushing for the decentralization of electricity supply, to allow municipalities with the technical and financial resources to source or generate their own power. NERSA should be actively encouraging and assisting municipalities such as the DA-run Stellenbosch Municipality, who recently announced their intent to become electricity independent, to put such measures in place.

As the DA, our top priorities are to #KeepTheLightsOn and make electricity affordable and available.

Issued by Kevin Mileham, DA Shadow Minister of Mineral Resources and Energy, 17 February 2021