South Africans advised to make submissions en masse on Eskom tariff hikes

Dear Cape Town

The Democratic Alliance (DA) notes that today is the deadline for South Africans to make submissions on Eskom’s proposed tariff hikes for the period of 2019-2022. The DA would like to urge that South Africans exercise their right to make their voices heard by submitting their objections to the tariff hike to the National Energy Regulator of South Africa (NERSA) as a matter of urgency.

Eskom is currently in the process of challenging the electricity tariff increases previously approved by the NERSA for the period of 2019 to 2022. Eskom wants consumers to initially pay 10-12% more for electricity, and thereafter the door will be open to a further four applications by Eskom, which will result in tariff increases by a whopping 50% over the next few years.

NERSA requested public comment and will then assess Eskom’s application following due regulatory processes. Mass public participation is essential to influence NERSA’s decision, with public comment opportunities closing on the 20th of January 2020.

In its court application, Eskom says the increase provided by NERSA is inadequate and presents a “material risk of potential catastrophic consequences”, not only for the power utility but for the country. But the real issue here is that Eskom has run out of money.

A 120-page report presented to Eskom by an independent specialist concludes that our National Treasury does not have the credit capacity or ability to borrow the required capital to fund Eskom’s significant day to day operational expenditures. Treasury can no longer assume financial responsibility for the rebuilding and maintenance of Eskom’s generation, transmission and distribution assets, nor can it pay for the significant off-balance sheet liabilities, especially not on a long term basis.

The DA has long maintained that government can not continue to fund Eskom and other state-owned entities that are no longer viable and are collapsing from within due to what reports indicate are rampant corruption and serious maladministration.

For any change to occur, sales volumes have to rise, not shrink. Eskom must be “ringfenced”, triaged, the books made transparent, top management given the degrees of freedom shielded from political interference and a chief restructuring officer with deep experience and credibility needs to be brought on-board to save this sinking ship.

Government must also give serious consideration to proposals that have long been DA policy, which inter alia means allowing independent power producers to supply electricity to local governments directly.

We cannot countenance this continued pouring of money into what has been and continues to be a sieve of unimaginable proportions.

South Africa has repeatedly bailed out Eskom and now, while on the brink of collapse, the utility is seeking to make consumers pay more. These blank cheques that follow failure and graft must stop – accountability and oversight is sorely required and as stated above, what is needed is for the entity to be “ring-fenced”, triaged and the books made public.

The public has until today’s deadline to make submissions on Eskom’s proposed increase, which could further hike up prices if approved – if you haven’t as yet, the time is now.

Regards

Ghaleb Cachalia MP
DA Shadow Minister of Public Enterprises