“Nersa showed independence in rejecting Eskom tariff hikes” - DA


Democratic Alliance (DA) Shadow Minister for Energy, Gordon Mackay, has described the National Energy Regulator of South Africa’s (Nersa) decision to reject the granting of a 9.58% hike in electricity tariffs to struggling power utility Eskom, as a “victory for consumers and the economy”.

In passing his findings earlier today, Nersa Chairperson Jacob Modise stated the state-owned parastatal’s application failed on several points with the most prominent being a lack of info regarding long-term planning and uncertainty over multi-year pricing determination (MYPD).

“Eskom should submit an application for the adjustment in the allowed revenue in accordance with the MYPD methodology. Alternatively, a new application for the period April 1 2016 to March 31 2019 with indicative projections for the period April 1 2016 to March 31 2019,” Modise said.

Speaking in a statement, Mackay said that the ruling “demonstrated true independence” which it will eventually pave the way for the country’s energy reforms.

“The Department of Energy and Eskom should now heed the DA’s advice and seek reform in terms of breaking the Eskom monopoly through increased competition within the sector, an increased focus on renewable energy and the rejection of expensive nuclear energy,” he said.

“Load-shedding is robbing South Africans of their livelihood as investors lose confidence in the economy and the manufacturing industry is forced to cut jobs. The electricity crisis has already cost the economy billions and resulted in countless job-losses. Passing the problem on to consumers through above-inflation tariff increases adds insult to injury, and cannot be supported”.

Mackay also stated that the outcome should result in the department opening-up to private investment in Eskom, “an increased focus on renewable energy and the rejection of expensive nuclear energy”.

“It is unthinkable that Eskom expected an increase of that nature which would have been an external shock to our economy. Nersa has demonstrated strong and credible leadership and has withstood a barrage of political pressure, setting the bar for how other State-Owned Entities and public bodies should conduct themselves,” he said.