Government could have given
NERSA an indication of what that bailout will be spent on and details of the
restructuring, so NERSA could consider this in the pricing
Eskom had asked NERSA for
increases of 15% a year, then upped this to 17% for 2019/20.
NERSA granted increases for the
next three years of 9.41%, 8.10% and 5.22%. The increase for the previously
approved RCA clawback also runs over those three years, which brings the
2019/20 increase to nearly 14%. An RCA clawback was also approved today for
2017/18, much lower than Eskom had requested, but this has yet to be calculated
into the prices.
“It’s a steep increase, 14% is
huge. It’s going to hit customers hard and the issue of failure to pay
electricity bills will be exacerbated,” says Chauke.
NERSA did not provide detailed
reasons for the decision.
OUTA welcomes NERSA’s decision
to review Eskom’s costs, efficiency and performance, its undertaking to
independently value Eskom’s Regulatory Asset Base (RAB), to conduct performance
audits on the power stations. These are issues which affect the prices. OUTA
has repeatedly criticised the RAB valuation as way too high, and this has a
substantial impact on prices.
NERSA said it is considering
investigating Eskom’s governance failures and adjusting prices accordingly
based on this or the outcome of investigations by other authorities. OUTA urges
NERSA to do this.
“OUTA looks forward to the
quantifying of the cost of corruption. If this is done properly it should also
bring prices down. We expect this to be done with the urgency it deserves,”
This is expected to be a
considerable sum, as the SIU is investigating the theft of R170bn from Eskom,
including R139bn linked to the building of Medupi, Kusile and Ingula power
OUTA had objected to the tariff
hikes, submitting objections to NERSA during the public participation process.
OUTA is encouraged by the massive public participation in this process – NERSA
received more than 119 000 written comments from the public.
OUTA is a proudly South African civil action organisation, that is
purely crowd funded. Our work is supported by ordinary citizens who are
passionate about holding government accountable and ensuring our taxes are used
to the benefit of all South Africans.