Nersa’s Nhlanhla Gumede suspended

As energy regulator Nersa embarks on crucial countrywide public hearings about Eskom’s quest for a 36% tariff increase, its chair, Thembani Bukula, has confirmed the suspension of full-time regulator member for electricity Nhlanhla Gumede.

Gumede was absent from the first hearing held in Cape Town on Monday, and Bukula led proceedings.

Bukula would not provide any details on the reasons except to say that electricity minister Dr Kgosientsho Ramokgopa informed Nersa of the decision pending an investigation into alleged “transgressions”.

The ministry said Gumede has been suspended pending the outcome of an independent enquiry.

“The minister is applying himself to an acting appointment and will announce once that nominee has been approached and accepted.”

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Ramokgopa has previously publicly stated that Nersa is not proactive enough, that he had addressed the matter with Bukula, and that Nersa needs to be strengthened.

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Bukula confirmed that Nersa’s full-time member for piped gas, Nomfundo Maseti, will act in his place. Maseti is an experienced regulator who previously acted in the electricity portfolio for an extended time after Bukula’s term as full-time member for electricity expired. He was later brought back as chair.

Gumede has long been trying to radically change how electricity tariffs are set. Nersa adopted his proposed Electricity Price Determination Rules (EPDR) in December last year but rescinded the decision a year later after a report indicated that it was unworkable and very risky.

In August, Gumede stated in an interview with the Sunday Times that rapidly increasing electricity tariffs are the result of Nersa’s inappropriate pricing methodology, which is linked to outdated legislation.

That prompted the regulator to issue a statement distancing itself from Gumede’s utterances.

Nersa was embarrassed by its failure to correct the unlawful method it used for a decade to set municipal electricity tariffs, despite a 2021 High Court order to address the issue. That led to an order declaring Nersa’s approval of tariffs for more than 100 municipalities unlawful and invalid.

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Nersa’s application for leave to appeal was dismissed, but it has petitioned the Supreme Court of Appeal to present its case. That is still pending.

Gumede’s suspension comes at a crucial time for South Africa’s fast-transforming electricity supply industry. In addition to Eskom’s tariff application, the regulator is also expected to rule on the utility’s application to change its tariff structure. Early in the new year, it must approve the actual tariff that will apply from 1 April 2025.

This article was republished from Moneyweb. Read the original here.