Slap bang in the midst of the Covid-19 disaster comes the announcement by the National Energy Regulator of South Africa (Nersa) that it has approved a 6.5% price increase for Eskom! That’s well above inflation and translates into an extra 3% per annum increase on electricity prices on top of the 9% per year already approved last year. We don’t think that’s fair.

Eskom failed to project its revenue accurately, but that does not mean it should be allowed to claw back shortfalls from customers. OUTA disagree strongly with Nersa's decision to approve Eskom’s application to recover another R13.3- billion from electricity users over the next two years. (Eskom applied to claw back R27.3-billion from electricity customers through power tariffs to cover costs incurred for the financial year 2018/19).

“It’s unacceptable that Nersa approved this latest increase to Eskom without providing a reasonable explanation to the public,” says Liz McDaid, Energy Portfolio Manager for OUTA. “As society, we need to know why we are prevented from questioning Nersa’s decisions. This could open the regulator up for possible legal challenges, which are unnecessary and will have to be paid for by the taxpayer – again.”

OUTA made submissions to Nersa earlier this year, challenging the tariff increases. “On the one hand Nersa has listened to the public and disallowed more than half of the revenue Eskom wanted. It also turned down Eskom’s claim for a refund, after the utility used expensive diesel peaking power plants. We believe that if Eskom had managed its operations effectively, it would have kept up with its maintenance. It didn’t, and now customers are expected to pay for Eskom’s bad management – and Nersa won’t tell us why it still gave Eskom the increase,” Liz adds.