DA rejects Eskom’s application for 32.7% tariff increase during ongoing load-shedding

The DA has rejected Eskom’s application to increase electricity tariffs by 32.7%, saying South Africans cannot pay more to be kept in the dark. 

The embattled state-owned power utility asked the National Energy Regulator of SA (Nersa) for a tariff increase which will see households pay more for electricity during  ongoing load-shedding. 

It said it needs “reasonable tariff increases” to address financial sustainability and liquidity challenges.

“Liquidity and solvency risks pose an inordinate threat to Eskom’s ability to continue as a going concern. To improve liquidity, we have restricted organisational cash requirements through targeted savings. 

“We had to rely on government support to maintain a positive cash balance, with increases in equity. Due to high debt servicing obligations, maintaining the liquidity buffer at acceptable levels continues to be a challenge,” said Eskom. 

Nersa was ordered by the Pretoria high court to publish Eskom’s tariff application for 2023/24 on or before August 1 and make a determination by December 24.

The DA said it would submit its objections to the proposed “rip-off” once Nersa opens public comments. 

“South Africans are already struggling to stay above water due to rising costs of living and a high inflationary environment. For Eskom to add an additional high electricity tariff increase for a service it cannot provide is simply unacceptable,” said DA MP Kevin Mileham.

Mileham said consumers cannot be expected to subsidise Eskom’s unviable business model and the ANC’s decades-long failure to open up the energy market to independent power producers.

“Instead of liberalising the energy market and allowing IPPs to bring new energy generation capacity online, [energy minister] Gwede Mantashe is busy wasting time on a fantasy about a ‘new Eskom entity to compete with Eskom’.

“Nersa should reject Eskom’s exorbitant tariff application because its first obligation is towards consumers, not Eskom,” he said. 

Mantashe is reportedly in talks with President Cyril Ramaphosa over the establishment of a “second Eskom’’.

The additional state-owned utility will work alongside Eskom and apparently focus entirely on generating electricity and building more power stations. 

Mantashe told the Sunday Times the country needs “baseload”, an apparent reference to burning coal.

“What we are suggesting — it’s not a decision yet — is let’s have a second generation company of the state and that company must focus on baseload and there must be a build programme for power stations,” he said.

“We can’t allow power stations to only hear decommission. We must also have a build programme and we think if Eskom has no capacity, let’s start a second generation company.”

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