Nersa’s CEO Nomfundo Maseti says it is maladministration, inefficiency and corruption that has caused Eskom’s financial distress while the power producer says it is Nersa’s consistent annual failure to grant adequate tariff increases.
Maseti reveals the absurd R1.8bn Eskom wants for incentive bonuses between now and 2022 – a fact that was carefully kept from the public in the tariff application published for its comment. She correctly questions how the utility could blow that much on bonuses while remaining so inefficient and running at a loss.
The vitriolic exchange of affidavits in which each party has exposed the others carefully hidden cards is a fascinating spectator sport. But, it is a game which can have no winners.
If Eskom wins the case, the citizenry has to cough up in the form of heinously high electricity tariffs. If past experience is anything to go by the country will gain nothing because paying more for electricity won’t lead to a more efficient or liquid Eskom. It will simply stave off the inevitable further collapse of the utility by a few months. If Nersa wins, it means the government – via the taxpayer – will have to find a way to service the multiple-billion rand shortfall that Eskom will experience.
The bottom line is that the taxpayer is funding the case on behalf of both sides and stands to lose either way. Doesn’t seem fair does it?
OPINION | Taxpayers will be net losers in Eskom debacle
Eskom is going to enormous legal expense to try to get more money out of the wrung-dry citizenry of this country in the form of electricity tariff increases.
The case is a complicated one involving Eskom’s revenue to related cost recovery formulas and other issues -- but the bottom line seems to be that Eskom would like to increase its electricity prices by 16,6% in April 2020 and further 16,72% in April 2021. This is more than double the tariff increase the National Energy Regulator of south Africa (Nersa) wants to allow.
Essentially, the regulator is all that stands between the citizenry and an ever-voracious Eskom which wants South Africans to continue to fund its failures at a exorbitant tariff.
It’s an interesting court case because both Eskom and Nersa have been forced to show their hands to an outraged public. It has exposed deficiencies in both the regulator and electricity provider, but particularly the latter.
Nersa’s CEO Nomfundo Maseti says it is maladministration, inefficiency and corruption that has caused Eskom’s financial distress while the power producer says it is Nersa’s consistent annual failure to grant adequate tariff increases.
Maseti reveals the absurd R1.8bn Eskom wants for incentive bonuses between now and 2022 – a fact that was carefully kept from the public in the tariff application published for its comment. She correctly questions how the utility could blow that much on bonuses while remaining so inefficient and running at a loss.
The vitriolic exchange of affidavits in which each party has exposed the others carefully hidden cards is a fascinating spectator sport. But, it is a game which can have no winners.
If Eskom wins the case, the citizenry has to cough up in the form of heinously high electricity tariffs. If past experience is anything to go by the country will gain nothing because paying more for electricity won’t lead to a more efficient or liquid Eskom. It will simply stave off the inevitable further collapse of the utility by a few months. If Nersa wins, it means the government – via the taxpayer – will have to find a way to service the multiple-billion rand shortfall that Eskom will experience.
The bottom line is that the taxpayer is funding the case on behalf of both sides and stands to lose either way. Doesn’t seem fair does it?
OPINION | Eskom gluttons a far cry from leaders like Mabuza
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