Parly committee criticises Nersa over electricity tariff increase

Parliament’s Portfolio Committee on Electricity and Energy has criticised the National Energy Regulator of South Africa (Nersa) for approving Eskom’s application for an increase in electricity tariffs.

Last year, Nersa approved the power utility’s 12,7% tariff increase application starting from the first of next month.

Members of the committee have requested Nersa to provide the rationale behind its decision.

Nersa told the committee that the approval of the tariff increase has conditions, which include addressing unplanned power outages.

Executive Manager at Nersa, Nomfundo Maseti, says, “We insisted that Eskom must reduce these unplanned outages. And we believe that if they were to do maintenance in a proper way, they can solve their maintenance regime. And we have given them money to do so. Therefore, they should be in a position to reduce the unplanned outages. We have put the bench mark for them as to where they need to be in terms of unplanned outages. And the unplanned outages are the ones that are causing the load shedding. So, if they can focus on that and perform appropriately, they should be able to reduce on that.”

Maseti says Nersa has to make adjustments based on the costs and debt Eskom has incurred.

“That shortfall made up 5,7%. It was not insignificant … and the stakeholders came forward to say that it is a concern and may be it will require some policy interventions as to how do we look into this going forward, because it may not be sustainable that consumers will have to come in and pay for that,” says Maseti.

But this explanation did not sit well with the members of the committee.

ANC member Fasiha Hassan and MK MP Adil Nchabeleng, says, “For example, the City of Cape Town charges the most exorbitant electricity costs in the country. The most expensive. And some of the poorest of the poor in Khayelitsha right now, in Gugulethu, Mannenberg, all sorts of other spaces, there is no relation on that level. When we go to municipalities, our people are paying R4 to R5 a tariff, at municipality levels to buy electricity vouchers. This is the reality on the ground. This is the livid reality. You know I am not going back to the process here.”

Other members were also fuming.

DA MP Kevin Mileham and ACDP MP Wayne Thring added their voices.