PICS: Start of Nersa hearing reveals bleak state of Eskom's finances
News / 14 January 2019, 12:13pm / Jason Felix and Marvin Charles
Cape Town - Energy activists gathered for the start of the public hearings being held by the National Energy Regulator (Nersa) on Monday.
Civil societies also attended the first day of the meeting. More than 16 presentations took place today along with 16 requests for comment.
The start of the meeting was marred, however, by the bleak picture Eskom painted of its financial state.
“We are aware that requesting a 15% yearly increase does seem steep, but Eskom’s financials have reached a crisis and we cannot solve this,” said Eskom’s group CEO Phakamani Hadebe.
He said the power utility had implemented some cost-cutting measures to alleviate the financial pressure.
“Over the next three years our debt will most likely escalate,” he said.
The hearings are being held at the Cape Sun Hotel. Eskom is seeking a 45% increase over three years – 15% annually. This increase is on top of the 4.41% hike that was already granted to Eskom by Nersa. Eskom has argued that this 15% increase is needed to ensure that it maintains its stability and growth trajectory.
Organisation Undoing Tax Abuse (OUTA) will be one of those to present their points of opposition to the increases, which were outlined in their submission to NERSA in November 2018.
“OUTA cannot accept such high tariff hikes at this stage, despite the fact that Eskom is broke,” says Ronald Chauke, OUTA’s Portfolio Manager on Energy, who is at the NERSA hearing in Cape Town.
“At best, we propose that NERSA should not allow Eskom to exceed CPI, which is around the 5% mark, but instead, Eskom should find savings by reducing the headcount and staff costs, along with returning to lower primary energy costs by undoing the inflated and often corrupt contracts entered into during the Jacob Zuma era.”
The public should not have to pay the price for Eskom's corruption and poor leadership, the group said.
“We are tired of inefficient SOEs believing they are able to pass on their massive operating and debt costs to society, when in fact they should be running their operations as innovative world-class entities,” says Wayne Duvenage, OUTA’s CEO.
Stop COCT founder Sandra Dickson also urged Capetonians to speak at the event.
“The 2018 Eskom increase was much higher by the time it reached the citizens of Cape Town as the City of Cape Town added its cut. “It is therefore expected that the annual increase will end up being more than 20% a year by the time it reaches the public,” Dickson said.
“We urge the public to attend the hearing. We must let Nersa see that Capetonians mean to support the objections against such hefty increases,” Dickson said.
Energy expert Ted Blom said although Eskom had acknowledged a bloated headcount of 35 000 staff including ghost workers, Nersa continued to ignore the gross inefficiencies.
“And it has since 2008 granted tariff increases of high percentages above the corresponding inflation rate. This has just fuelled and financed the rampant corruption,” Blom said.
Last year, President Cyril Ramaphosa intervened in the crisis at Eskom by appointing a team of eight to steer the board in the right direction by January 31 this year. Two of those members have since resigned.
Another group that has joined the anti-increase chorus is the Southern African Faith Communities’ Environment Institute. It will – along with faith and community leaders – present its arguments for opposing Eskom’s proposed tariff increases.
The institute’s Energy and Climate Justice Campaign Co-ordinator, Vainola Makan, said that if granted, the tariff increase would severely impact all consumers of electricity. She said nationwide load shedding was still a reality, highlighting the urgent need for the restructuring and improved management of Eskom.