Taxpayers Will Suffer is Eskom Fails to Resolve Tariff Hikes Dispute With Nersa

Taxpayers Will Suffer is Eskom Fails to Resolve Tariff Hikes Dispute With Nersa

  • South Africa's power utility has stated that if electricity costs do not increase then taxpayers will have to cover the bill for the shortfall of approximately R300 billion
  • Eskom has made an application for tariff increases in June, however that application was rejected by Nersa
  • Eskom is of the belief that their application was rejected on the basis that Nersa change their methodology processes

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JOHANNESBURG - Eskom and the National Energy Regulator of South Africa (Nersa) continue to go head to head about the increase of electricity tariffs.

Nersa has recently rejected Eskom's proposal to increase tariffs in South Africa, however, the power utility says if tariffs do not go higher then taxpayers will have to cover the shortfall.

Eskom, taxpayers, Nersa, tariff increases
Eskom says there will be a shortfall of R300 billion if tariffs don't increase. Image: Gianluigi Guercia
Source: Getty Images

The power utility estimates that the annual shortfall will be R300 billion if Eskom is unable to charge higher fees for electricity, according to a report by MyBroadband.

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General Manager of Regulations at Eskom Hasha Tlhotlha-Lemaje says Eskom made its application for tariff increases in June this year, however, Nersa rejected the application on the basis that Eskom used a methodology set to expire in March 2022 to determine new tariffs.

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According to EWN, Eskom says tariff increases were rejected because Nersa changed the multi-year pricing determinations.

Tlhotlha-Lemaje says that Eskom was only trying to make customers pay only the efficient cost of power. She has not verified the claims that the power utility asked for a double-digit tariff increase.

Embattled Eskom reduces gross debt despite a loss of R18.9 billion

Briefly News previously reported that Embattled power utility Eskom recently stated that the Covid-19 pandemic has impacted the financial performance for March 2021 in a negative way. Sales were volumes down by 6.7%. It lessened the volumes' gross debt by R18.9 billion.

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This was a 16.9% reduction and created a massive debt of R401.8 billion. The power utility's debt remained non-viable and attracted a nett finance that cost R31.5 billion. It turned the operating profit of R5.8 billion into an after-tax loss of R18.9 billion.

For the 2020/21 financial year, Eskom gained revenue of more than R204 billion. According to eNCA, Eskom disclosed its annual results on Tuesday, 31 August.

BusinessTech reported that Eskom has still been negatively impacted by loadshedding this year. Group CEO Andre de Ruyter explained that Eskom was not reprieved by the biggest impacts of the pandemic.

Source: Briefly News

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