Outa pushes back on Eskom’s proposed 15% tariff increase

The Organisation Undoing Tax Abuse (Outa) has launched a petition against Eskom’s proposed 15% tariff increase for the next three years from 2019 to 2021.

This comes after Eskom made an application with the National Energy Regulator of South Africa (Nersa) for the 15% price increase.

In a statement issued on October 19, Eskom said Nersa has initiated a public consultation process on the application.

The power utility said the increase being applied for “does not cover the entire debt commitment costs, equating to a cash shortfall for the 2019/20 and 2020/21 years”.

Outa stated that it will make submissions to Nersa, challenging Eskom’s planned 15% tariff hike.

#OUTA will make submissions to Nersa, challenging #Eskom’s planned 15% tariff hike. Add your name to this drive by clicking on the link below and share this message with as many people as possible. Enough is enough. Please RT widely for awareness. https://t.co/ztSpKYqdnF

— OUTA (@OUTASA) November 1, 2018

In a statement, the organisation said: “Eskom’s proposed 15% price increase is bound to place electricity out of reach for many South Africans and further promote the wealthy to move away from Eskom generated power, and further encourage the poor into the growing psyche of non-payment for exorbitant services.

“As it stands more than 3 million people in South Africa do not have access to electricity and OUTA estimates that many more will most likely fall off the grid, or refuse to pay, due to its unaffordability.”

The organisation said despite the 4% approved in the regulatory clearing account “claw-back” agreement Nersa implemented upon earlier this year, Eskom is now asking for an additional 15% price hike. “That’s close to a 20% increase in one year.”

Due to Eskom’s decline in productivity in recent years “while its headcount went up”, the power utility overinflating its asset base “skewing the rationale for further revenue increases” and Eskom failing to hold “past transgressors” accountable “for wasteful expenditure” and the utility’s “history of poor debt collection”, Outa said it would push back against the proposed 15% price increase.

(Compiled by Makhosandile Zulu)

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