Eskom looks to hike electricity tariffs to recoup load shedding losses

In an attempt to recoup losses incurred by load shedding, Eskom will be challenging an earlier electricity tariff ruling, despite failing to provide the country with adequate power.

Energy expert Ted Blom, a lead contributor to the Energy Expert Coalition (EECO), has called on South Africans to voice their opinions with regards to Eskom’s ongoing bid to increase electricity tariffs beyond what was originally awarded by the National Energy Regulator (Nersa) for the 2018/2019 year.

Load shedding: Eskom looking to recoup R27-billion

According to Blom, Eskom’s challenge has been emboldened by the recent bout of load shedding which has cost the utility in excess of R27-billion. The flailing state-owned enterprise, which has most recently failed to keep South Africa powered, originally launched a high court bid to challenge Nersa in October.

Eskom’s general manager for regulation, Hasha Tlhotlhalemaje, confirmed that the utility was attempting to recover R34-billion in operational expenses, incurred during 2018. In conjunction with the 2018 recovery bid, Eskom has launched another legal process concerning a R69-billion bailout and increasing electricity tariffs.

Blom elaborated on the current legal challenge and the impact Eskom’s successful bids will have on South African citizens, saying:

“The first applications are expected to be heard early next year. Eskom is arguing that Nersa short-changed it by at least R100-billion and is asking the court to order the claw back of at least R69-billion.

If the first, urgent, application succeeds, it could result in tariffs increasing by 16.6% in 2020, instead of the 8.1% as things currently stand.”

Eskom’s other claims

Eskom’s claims are numerous and varied, all intended to boost its financial standing after a particularly dismal year, wherein the utility recorded its greatest net loss of R21-billion. According to Blom, Eskom is attempting to recoup the following, with help from the courts in forcing Nersa’s hand:

• R5.4-billion due to reduced sales;
• R16.7-billion additional revenue for primary energy (coal); and
• R4.8-billion for variance in “other” costs (employee costs).

Nersa, however, won’t be taking the challenge sitting down. Blom noted that the regulator has called for the public comment before 20 January 2020. In his call to action against Eskom’s challenge, Blom said:

“If we allow Eskom to succeed, we will see a substantial jump on current tariffs. However, as the increase is over and above their annual tariff hikes, in reality, your electricity costs will double within two years.”

You can comment on Eskom’s application to recover R27-billion in losses through a tariff hike by visiting the Energy Expert Coalition’s web portal.