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Eskom's threat that lights will go out if no fee increase is blackmail, says Outa energy advisor

Outa’s energy advisor Liz McDaid said Eskom’s constant reasoning that if it does not get its proposed increase the lights would go out amounts to blackmailing. Picture: Reuters

Outa’s energy advisor Liz McDaid said Eskom’s constant reasoning that if it does not get its proposed increase the lights would go out amounts to blackmailing. Picture: Reuters

Published Jan 20, 2022

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Pretoria - Eskom’s constant reasoning that if it will not get its proposed increase the lights would go out amounts to blackmailing of civil society.

This was a view of parliamentary and energy adviser to the Organisation Undoing Tax Abuse (Outa), Liz McDaid.

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The expert was responding to Eskom’s proposal to the National Energy Regulator of South Africa (Nersa) to have electricity prices increased by 20.5% for 2022/23.

McDaid compiled Outa’s submission to Nersa ahead of the Friday deadline for public comment on the proposed electricity price hike.

She said as part of the submission: “The rules that allow Eskom to continually apply and receive additional tariff increases based on reasons that in general fail to stand up to scrutiny appear to civil society to amount to blackmail: ‘If we don’t get an increase, the lights will go out.’ This is an unsustainable approach.”

She lashed out at Eskom, saying it was “not focused on providing electricity to enable all South Africans to grow but is only focused on providing electricity to those wealthy enough to pay the ever-increasing bills”.

Liz McDaid and Makoma Lekalakala were awarded the Goldman Environmental Prize for their leadership in halting the SA government's secret nuclear deal. Picture: Gerald Petersen/Double Dutch Media

Outa pointed out that the fact that Eskom continued to have its way with previous legal challenges against Nersa suggested that there was regulatory weakness that needed to be addressed.

The entity recommended that Nersa must apply a “heavy-handed regulatory approach” to Eskom in a bid to minimise the negative effects on the economy, and reduce the cost of doing business.

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In addition, the regulator must validate the assumptions used in Eskom’s application, according to Outa. “Nersa must request a written commitment from Eskom that it will comply with regulatory and governance parameters,” it said.

It emphasised that the regulator needed to “defend consumers and exercise rigorous oversight over Eskom to keep electricity prices down”.

“Eskom’s business interests cannot be allowed to jeopardise economic recovery. It is actually in Eskom’s own interest to grow the economy in order to grow electricity sales,” Outa said.

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McDaid said: “We are optimistic of Nersa’s invigorating approach to engage with all stakeholders, especially on the Multi-Year Price Determination, but the proof is in the pudding whether such engagements are in fact meaningful and not merely held for the sake of public participation.”

In line with its determination methodology, Eskom wanted a 20.5% increase for the 2022/23 financial year, followed by a 15.07% increase next year and a 10% increase the year after.

Eskom this week indicated that the increase was owing to the requirement to increase purchases of energy from independent power producers and the increase in carbon taxes.

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Both the City of Tshwane and City of Cape Town are among many entities which publicly repudiated the proposed increases on the grounds that they are unaffordable to consumers.

Pretoria News

Related Topics:

EskomNERSAEnergy

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