Stakeholders ask Nersa to dismiss Eskom’s tariff hike

Stakeholders from various sectors have pleaded with the National Energy Regulator of South Africa (Nersa) to consider the impact of Eskom’s latest application for tariff hikes. This came out during a public hearing in Mbombela, Mpumalanga, on Eskom’s application to Nersa for a tariff hike of almost 20% for the next financial year.

Different stakeholders that include the Agricultural and Energy sector believe the hike will have a detrimental effect on the economy and may lead to job losses.

Some of the companies that are high electricity consumers, say they had to retrench some workers to save their businesses from escalating costs of running their businesses.

The stakeholders have requested Eskom to come up with strategies to reduce its costs instead of the tariff hikes.

According to Xolani Mbanga from Energy Intensive Users Group, the proposed increase hike will cripple the already struggling industry.

“19.9% is completely unacceptable, we think that this will cripple the industry as the industry currently can’t even afford any increase, some of our members, the energy’s input  cost, is close to 50% we can’t afford to have price increase that is higher than the CPI increase. We do understand that we are putting Eskom in the corner but the fact that we can not control commodity prices, we can only control our input costs.”

Meanwhile, Jacques Schoeman from the South African Growers Association has appealed to the energy regulator to carefully apply its mind on the power utility’s application.

“The appeal to Nersa is to be responsible in applying this tariff, we know this methodology that they have to look at, we also heard from Eskom’s side the key points that they put forward, but some of these key points are really questions marks, and they need to make 100 % that these question marks are true and that we actually paying rightfully what we should be paying.”

However, Eskom has justified the almost 20 % application for electricity hike.  According to the power utility, the proposed tariff hike covers a number of factors. Eskom spokesperson Khulu Phasiwe says the application is in line with the national regulator’s formula.

“About R35 billion of that amount is actually for purchase of energy from renewable energy projects, the IPPs and then there is also the amount of R8 billion, which is a tax or a levy which is called an environmental levy in other words that money goes directly to the national treasury. We are collecting on behalf of the fiscals, and the other amounts are for our operational requirements, because we still have to operate as a business.”

Nersa  is currently on a nationwide roadshow to get the public’s view on the application by the power utility. The energy regulator is expected make its final decision on the Eskom’s application by next month.