A week ago, President Cyril Ramaphosa said his hands were tied when it came to the 18.65% tariff increase given to Eskom by South Africa’s National Energy Regulator (Nersa)… adding, the reality is that there is nothing he can do, experts say. What is more worrying is that his direct message to Eskom may be outside his authority and power as the president of the country. Speaking at the Free State ANC provincial conference in Bloemfontein, Ramaphosa said he had asked Eskom not to impose the 18.65% tariff…
A week ago, President Cyril Ramaphosa said his hands were tied when it came to the 18.65% tariff increase given to Eskom by South Africa’s National Energy Regulator (Nersa)… adding, the reality is there is nothing he can do, experts say.
What is more worrying is that his direct message to Eskom may be outside his authority and power as the president of the country.
Speaking at the Free State ANC provincial conference in Bloemfontein, Ramaphosa said he had asked Eskom not to implement the 18.65% tariff increase from April.
‘political interference’
However, energy expert Lungile Mashele said the president’s unprecedented action is a clear indication of political interference which is one of the biggest threats facing electricity utilities.
“I think he believes he can do this, because he has done it. But it is wrong and it is the same as political interference,” he said.
“What the president should do is take note of Nersa’s decision to increase and then legally challenge it with a counterclaim. Eskom has no choice but to implement the increase.
Also read: Ramaphosa is ‘out of order’ as he asks Eskom not to implement increases
Mashele said the electricity utility cannot do anything without approval from Nersa.
“I’m not even sure what that means or how Eskom will justify not increasing rates.”
“The only person who can stop the increase is the regulator. But on April 1, they have to implement it,” he said.
“If Eskom does not implement the increase, it will not be able to pay its debts adequately or even maintain salaries and maintenance.”
The increase will help Eskom
On Sunday, Eskom chairman Mpho Makwana said Nersa’s decision on rate hikes would go a long way to solving the liquidity challenges facing the electricity utility, “and rectifying the gap in the cost-reflective tariff structure”.
Nersa spokesman Charles Hlebela said it will take a high court decision to overturn Add, that “Nersa can no longer make its own decision”.
Eskom spokesperson Sikonathi Mantshantsha said the power utility could not delay the implementation.
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“If someone wants to change the regulator’s decision, they have to approach the court to set aside and review the decision, which is a legal process,” he said.
“This discussion has not even started. The price of electricity is determined by the statutory process and regulated by the regulatory process as directed by the Electricity Regulation Act 2006.
“Eskom applies for increases using a specific formula and Nersa has to make a decision on what increase to grant. Eskom cannot charge another price or reverse a decision made by the regulator after a public consultation process.
Government ‘usually involved’
However, independent energy analyst Pieter Jordaan said this was no surprise as “governments are used to engaging with Eskom”.
“As the president may want to try and soften the burden on consumers, there is much more at play here, which the government needs to take into consideration,” he said.
“They are asking this from the wrong party. Eskom cannot just thumb their noses. It takes more thought than just asking.”
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The Congress of the People (Cope) welcomed Ramaphosa’s request to Eskom and recommended that it be cancelled. “
President Ramaphosa should instruct Finance Minister Enoch Godongwana to make funds available for the smooth running of Eskom,” Cope spokesperson Dennis Bloem said.
“People [are being] punished twice: on the one hand crippling the open, on the other, people still have to pay increased rates. It is unacceptable and unfair.
– reitumetsem@citizen.co.za