Steep electricity prices loom as Nersa grants Eskom permission to recoup lost income
Eskom is seeking a further R69 billion of additional income from the National Energy Regulator of South Africa (Nersa), which could spell even worse news for consumers according to energy expert Chris Yellend.
The latest court application follows a decision by Nersa on Thursday to award the struggling power utility an additional R6 billion rand of allowable revenue, after court rulings last year had set aside several of its earlier decisions.
Yellend says big news regarding electricity prices will be heard in court on Friday.
Should the power utility be victorious in court, ordinary South Africans could end up paying the price.
"The big decisions, however, have still got to be made. There's some court action taking place where Eskom is claiming a further R69 billion of additional income that was not granted to it by Nersa.
"This is a much bigger impact on the price than the R6 billion that was decided upon today. Those may involve very significant price increases and Nersa is appealing the matter.
"But this will have a far bigger impact on the price of electricity going forward depending on the outcome," explains Yellend.
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Thursday’s decision by Nersa could result in a tariff increase of 10.95% over a year or 9,53% over two years.
The regulator said that time which Eskom would recover the additional income had not yet been decided.
Yellend says the increase will make a sever dent in people's pockets.
"It's an extra couple of per cent over what is was going to be (the initial 8,5%) coming at this time when we have a covid crisis when the economy is in a bad shape when customers are really feeling the pain.
"A 10% increase in the prices of electricity will certainly be painful," he says.
He adds, however, that Eskom must be allowed to sustain itself.
"And therefore, the security of supply in South Africa".
During the press briefing, Nersa's Nhlanhla Gumede noted the apparent correlation between the hike in prices and decline in sales but, Eskom has not conceded to this fact.
Yellend echoed the sentiments.
"No doubt that when the prices go up as far as they have, people start to use less of the product and use electricity with much greater care and they also look for alternatives.
"The impact of rising is felt by Eskom in many ways. There is a correlation but it's not the only answer to the problem.”
