Nersa gives Eskom the green light to charge more to generate R13.3 billion
Nersa has given the cash-strapped power utility permission to increase the cost of electricity by 6.5 percent, a decision that OUTA has strongly opposed.
The Organisation Undoing Tax Abuse (OUTA) has criticised the decision by the National Energy Regulator of South Africa (Nersa) to approve Eskom’s application to recover R13.3 billion from electricity users over the next two years.
On 15 April Nersa gave the cash-strapped power utility the green light to increase the cost of electricity, a decision that OUTA’s Energy Portfolio Manager Liz McDaid has opposed due to Nersa’s failure to provide its reasons for approving the price hike.
“We find it unacceptable that Nersa approved the 6.5 percent increase without providing a reasonable explanation for the decision to the public,” she said.
In August 2019, Eskom applied to Nersa for tariff increases in order to recoup R27.3 billion from customers to cover its 2018/19 financial year costs. OUTA made submissions against this and said it was pleased to see that more than half of that sum had been rejected.
McDaid believed it was time for Eskom to face the music. “If Eskom had managed its operations effectively, it would have kept up its maintenance. This didn’t happen, and customers should not have to pay for the utility’s bad management.”
A statement released by Nersa on 15 May said the decision had been made after ‘conducting the due regulatory processes’. This included, it said, publishing Eskom’s application and inviting written comments from stakeholders from 3 December 2019 to 20 January 2020. The statement read, ‘The Energy Regulator also conducted public hearings in eight of South Africa’s nine provinces from 3 to 24 February 2020. The public hearings afforded interested and affected stakeholders the opportunity to present their views, facts and evidence.’
OUTA said that while it acknowledged that civil society was involved in the regulatory process, Nersa was yet to provide reasons for the decision.
Nersa said that the reasons would be shared ‘in due course’.
