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Nersa requests Eskom to reconsider high tariff increase

So far, Eskom has not been able to justify why it requires a tariff increase of 15%.

Picture: EWN.

JOHANNESBURG – The National Energy Regulator of South Africa (Nersa) has described Eskom’s application for a 15% tariff hike as defective.

The energy regulator on Monday held public hearings on the power utility’s request in Midrand.

Nersa has requested Eskom to reconsider the high tariff increase.

Eskom’s tariff hike application has been largely scrutinised with concerns that the power producer is not being entirely transparent about its financial books.

So far, Eskom has not been able to justify why it requires a tariff increase of 15%.

Chairperson of the hearing Nomfundo Maseti said: “Where’s the information showing that? If there’s a price increase, this is the extent to which the demand is impacted, where is that information?”

At the same time, energy expert Ted Blom says Eskom is simply inefficient and doesn’t qualify for a tariff increase.

“I think this is shortsighted, reckless and non-prudent behaviour.”

Various organisations and energy experts made representations on Monday sharing similar views, saying Eskom’s proposed tariff hike is unaffordable.

POTENTIAL JOB LOSES

Business Unity South Africa (Busa) has warned of a stagnant economy, constrained investment and job losses if Nersa approves Eskom’s tariff increase of 15%.

Busa's Martin Kingston says while Eskom’s mandate is to provide reliable and affordable electricity, it’s become clearer over the past several years that it’s operating model needs urgent reconstruction.

Kingston says the country’s economy will not be able to tolerate the proposed tariff hike.

“If the tariff application is approved as tabled, significant job losses would ensue.”

Busa has also questioned why consumers will have to foot the bill for Eskom’s over staffing, maintenance backlogs and the power utility’s failure to recover municipal debt.