AfriForum condemns the National Energy Regulator of South Africa’s (Nersa) decision to grant a tariff hike increase of 9,4% for the 2019/2020 financial year and will request Nersa’s reasoning behind this decision. Tariff hikes such as this one is unsustainable and that Eskom’s state-guaranteed monopoly on electricity supply is extremely unhealthy for the country, its people and its economy.
Nersa also granted an amount of R3,869 billion for the Regulatory Clearing Account (RCA), after Eskom applied for R22 billion.
AfriForum opposed this tariff hike from the outset by submitting written comments to Nersa. The civil rights organisation also partook in the public participation process by presenting a submission which argued that the cost of Eskom’s alleged corrupt activities and maladministration should be excluded from the calculation of the coming year’s electricity tariff.
Dr Eugene Brink, Strategic Advisor for Community Affairs at AfriForum, says that Eskom could not prove that it deserved higher increases. “The government uses Eskom’s hegemony as leverage to keep the public and business sector hostage, which conflicts with best practices elsewhere in the world. Eskom’s dominant position – it provides 95% of the country’s electricity – also allows the organisation to continually apply for excessive tariff increases for electricity. Poor management style and the fact that officials are not held accountable for maladministration and corruption, are largely the cause of the problem at Eskom.”
“Eskom’s maladministration regarding municipal debt was an important point of discussion in the public participation process. If Eskom cannot handle the management of municipal power bills, Nersa should act more strictly with regard to parties that violate their licence conditions. South Africa needs a more decentralised electricity sector. Eskom should preferably be privatised, but even if it remains state owned, it must ultimately be merely one of a variety of electricity providers. It must be exposed to market forces, like many other firms in several other sectors, so that consumers can eventually have more and better choices. This will force Eskom to eliminate wastefulness and corruption and to be more competitive, or run the risk of going under,” Morné Mostert, AfriForum’s Head of Local Government Affairs, concludes.