South Africans to pay the price for Nersa’s “mistakes”

28 June 2020

The Democratic Alliance (DA) calls on the Auditor General of South Africa to audit the National Energy Regulator of South Africa’s (Nersa) pricing and regulatory account determinations on an annual basis.

Nersa has reportedly withdrawn oppositions in two court cases against Eskom and conceded to having made mistakes in calculating tariffs for the parastatal, costing Eskom billions in revenue. In a third court case, fault against Nersa has already been determined, and the fourth case before court will likely follow suit.

Nersa’s “mistakes” will cost the South African public dearly.

The entity has become overly complicated and bureaucratic in its processes, leading to errors such as this. And once again consumers will have to bear the brunt of the burden.

Are we to trust that this was Nersa’s only mistake, or could this open the door for a review of all Nersa’s pricing determinations, spiking further increases?

South Africans can barely afford electricity prices as it is. The economy is in free fall due to the extended Covid-19 lockdown and years of state abuse. Unemployment numbers are soaring, and businesses of all sizes are closing their doors permanently. To top this all off Eskom is suggesting a price hike of 15% to recoup the loss that Nersa’s error has cost them.

Now more than ever, South Africa needs an Independent Electricity Management Operator, as proposed by the DA's private member's IEMO Bill, currently before parliament for consideration. This would level the playing field by creating an independent grid operator, which would be at liberty to purchase from all generation sources (including Eskom and independent power producers) at market related rates.

Issued by Kevin Mileham, DA Shadow Minister of Mineral Resources and Energy, 28 June 2020