The DA calls on the National Energy Regulator of South Africa (NERSA) to resist the temptation of increasing electricity tariff increases to fund to the administrative incompetency and alleviate the financial crisis that persists at Eskom.
On Friday I met with Mr Mbulelo Ncetezo from NERSA in order to clarify the approach NERSA will take in mitigating the financial crisis at Eskom, without everyday South Africans having to bear the cost.
Electricity tariffs cannot lose touch with inflation, and South African consumers cannot be expected to pay for the inefficiencies of Eskom. NERSA has already granted Eskom above inflation electricity price increases over the last six years, and this cannot continue to happen.
While the Multi Year Price determination (MYPD3) issued by NERSA indicated an annual 8% electricity price increase, NERSA recently announced that after analysing the Regulatory Clearing Account (RCA) an additional 4% increase is to be authorised.
South Africans will therefore be bracing themselves for a 12.69% electricity tariff hike.
However, this percentage increase could be even higher, as NERSA is waiting for Eskom’s application based on the 201314 Eskom financial year – with the possibility of further increased electricity tariffs based on that application.
Eskom not only faces a R225 billion funding gap, but it is also facing a mounting cash-flow squeeze. It continues to burn cash feverishly to keep the lights on by using diesel fired gas turbines. It is spending close to R2 billion per month on diesel supplies, which is only adding to its financial woes.
One solution I gly urged was for Eskom to properly implement its collection procedure in relation to the billions owed by municipalities. This failure of municipalities to pay Eskom has contributed significantly to the current cash crisis.
NERSA as an independent regulator should protect the interests of ordinary South Africans.
Ordinary South Africans cannot be held accountable for the maladministration of these dysfunctional municipalities, and certainly cannot afford double digit price increases.
I have also made a formal request for the intervention by the Regulator in terms of its powers and duties of mediation between Eskom, municipalities and customers, with the view to protect paying consumers from disconnection notices.
Power cuts, which have cost the economy an estimated R300 billion since 2008, have again become commonplace as Eskom scrabbles to stave off a total meltdown of the grid. Extra power outages and increased electricity tariffs will have a serious impact on economic growth and have a negative effect on our ability to create jobs.
The DA will continue to monitor the situation closely in order to ensure ordinary South Africans do not foot the bill for government incompetency.
Shadow Deputy Minister of Finance
Source : Democratic Alliance