OUTA says No to Eskom’s 66% increase request

Today OUTA is at the National Energy Regulator of SA (Nersa) public hearings in Midrand, objecting to Eskom’s application for price increases over the next three years.

OUTA has already made a written submission to Nersa, objecting to the increases, and today’s presentation is based on that submission. Eskom’s Multi-Year Price Determination application (MYPD6) is for the years 2025/26 to 2027/28. OUTA’s core argument is that Eskom’s application for increases of 36.15% for 2025, 11.81% for 2026 and 9.1% for 2027 is excessive and will have adverse impacts on South Africa’s economy, customers, and society. The increases will result in a 66% price increase over the three years.

“OUTA broadly opposes Eskom’s application for a revenue and average electricity price increase of 66% over the next three years, coming as this does after 15 years of price increases that were significantly above the inflation rate each year,” says the presentation.

“The Eskom MYPD6 application displays a cavalier disregard for and an inadequate appreciation of the negative impacts of the proposed price increases.”

OUTA’s presentation is made by energy expert Chris Yelland, who is an energy advisor to OUTA.

Yelland says Eskom focuses on increasing revenue but pays little serious attention to reducing its cost structure, reducing debt and finance costs, reducing losses, improving financial and operational performance, or disposing of non-core assets. For example, it budgets for a 38% increase in primary energy costs over one year.

“The Eskom MYPD6 revenue application does not adequately drill down, identify, set and commit to clear targets for specific cost reductions, and performance and efficiency improvements across the major cost categories,” says Yelland.

Recommendations include holding independent reviews of Eskom staffing and remuneration, and to set targets to reduce losses, and focus on the urgent need to improve performance and efficiency.

“The President’s emergency plan to end load shedding and the establishment of the National Energy Crisis Committee (NECOM) headed by the Minister of Energy and Electricity has resulted in the achievement of 240+ days without load shedding, and has shown what can be achieved with committed leadership and focus. It is OUTA’s view that a similar dedicated national effort and focus is now required to address issues of energy poverty, energy access, energy affordability, and the price of electricity which is spirally out of control,” says Yelland.

More information

OUTA’s presentation to Nersa is here.

OUTA’s statement on 5 November about the submission is here and the full submission is here.