Nelson Mandela Bay rejects Eskom’s proposed 15% tariff increase

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Residents, civil society groups and the business community in the Nelson Mandela Bay have rejected Eskom‘s application for a 15% tariff increase over three years. This emerged when these stakeholders were presenting their oral submissions at the Nersa public hearings in Port Elizabeth in the Eastern Cape.

The Nelson Mandela Bay Business Chamber has argued that the increase will ultimately force investors out of the metro as the high price of electricity will make their business not viable. It further stated that the hike will have a dire impact on the residents of the city.

The CEO of the Chamber, Nomkhita Mona, says Eskom has failed to meet its objectives.

“It doesn’t seem there is a long-term plan; it doesn’t seem there is a vision; it’s also seems the reason they want us to pay more for electricity … it’s because of their own mistakes and we believe that the consumer should not pay for that and that it is unfair and not sustainable for business.”

Eskom made some admissions regarding faults in the power utility’s long-term strategy. Eskom has argued that this 15% increase is needed to ensure that it maintains its stability and growth.

Eskom Chief financial officer, Calib Cassim, says it is imperative that they adhere to their commitments.

“Ultimately, from what Eskom is looking at financially, we have commitments to make and if we can’t meet our commitments into the future because R242 billion of our debt is guarantee, when Eskom cannot make those commitments going forward, government will have to step in and take over that debt. And they would have to find a way in servicing that debt going forward. So, part of this application is trying to prevent that situation in putting government in that awkward position.”

The national power utility is about R420 billion in debt.

In mid-December, President Cyril Ramaphosa appointed a task team to advise government on how to resolve the power utility’s challenges.

Nersa Regulator and Chairperson of the panel, Nomfundo Maseti, says Eskom has admitted to its faults and should take full accountability.

“Eskom today has come out forcefully and showing us and making certain admissions regarding the false on their part and the mistakes that they have made. And also showing that there were certain things that they could’ve done better and controlled in terms of the plant performance and generating capacity and the fact that even the availability (of) those plants have come down in the past month or two to 63% and that is quite serious.”

Meanwhile, residents of the Nelson Mandela Bay Metro have raised their concerns about the possible tariff hike.

“We don’t feel well with the increase of the tariff, as a community and the whole country. Now, you need to make up a plan, government, because most of us are unemployed,” laments one resident.

“I feel very bad and sad because it is totally ridiculous, because I believe electricity should be applied free to every citizen in the country,” says another.

Nersa is expected to announce its decision on 1 March.

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