Nersa promises Eskom hike will be ‘affordable’

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Cape Town – While Nersa cannot say that there will be no electricity tariff hike, it will make sure such an increase is affordable, Mbulelo Ncetezo, chair of Nersa’s panel at hearings on Eskom’s tariff hike application, told Fin24 on Monday.

One option would, for instance, be to spread an increase over a number of years.

He said Nersa – the  National Energy Regulator – received more than 23 000 responses regarding Eskom’s application to increase its electricity tariffs by an average of 19.9%.

“Never before have we seen so many responses. It shows people understand what the process is about,” he said.

READ: Why Eskom is asking for a 19.9% tariff hike

“The main thing we have realised so far in the hearings is that consumers cannot afford higher electricity any more. The way Eskom is managed also worries people. Eskom is not trusted with our money any more.”

Nersa’s public hearings are set to take place in all nine provinces, ending in Gauteng on November 16. 

Sustainable prices 

He pointed out that, at the same time, Eskom sales are down and people are asking at the hearings why they should be paying as customers if Eskom’s projections were out in the past.

“The problem is that we must make sure Eskom is sustainable and that electricity prices are sustainable. Eskom did a lot of borrowing and if it fails to repay its debt, it will fall back on the taxpayers,” said Ncetezo.

“We must not get to the point where government has to bail out Eskom. The whole country will then go down with Eskom. We are, therefore, asked to perform a delicate balancing act.”

He said he is, nevertheless, confident that Nersa will find the best possible solution by early December.

“We don’t manage Eskom, but what we can look at is its performance. So, if management is inefficient, we will deal with that – like we did with the high diesel usage in the past, for instance,” he explained.

“We do not want Eskom to default. Ratings agencies are watching us like hawks. We must not get to junk status.”

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