‘Solve issues before hitting taxpayers’

BEFORE Eskom can concern itself with improved ways to extract more money from the taxpayer it should first solve the systemic challenges and mismanagement at the power utility.

This was the view of Cape chamber of Commerce and Industry president Jacques Moolman in response to Eskom’s proposed tariff restructuring submitted to the National Energy Regulator of SA (Nersa).

The proposed tariff restructuring by Eskom, which could see customers pay more or less, has received mixed reactions with some role-payers saying the proposal was nothing but a smoke screen.

It comes as several court challenges have been launched against Nersa where the methodology used for the tariff is brought into question.

Moolman said while the chamber was in support of some of the proposed amendments, he believed Eskom’s fundamental financial and revenue issues need to form part of a robust roundtable discussion before any new tariff structure is finalised.

He said the proposed time-of-use tariff would help reduce pressure on peak hours and thereby increase grid stability.

For time-of-use Eskom has reviewed the prices and time of use ratios between peak, standard and off-peak periods based on requests to reduce winter prices.

Eskom warned that if the winter price is reduced, it would mean that other prices in all other time periods would have to increase.

Another amendment was removing the inclining-block-tariff which Eskom believes is widely disliked by customers.

This, Moolman said was a welcome move. “However we feel deliberations around tariffs needs to form part of the broader urgent discussion around the future of energy policy and of the power utility itself.”

He said urgent steps to involve all sectors of society in long-term decision-making needed to be taken.

“Government has shown itself to be incapable of providing energy security, and the public has lost faith in Eskom and its various tariff structure and price increase proposals,” Moolman said.

Earlier this year, the Nelson Mandela Bay business chamber and the Pietermaritzburg chamber of commerce turned to the courts challenging the methodology used to determine electricity tariffs in municipalities.

The matter was heard in court June with an outcome expected around September. A similar case involving Nersa, City power and the City of Joburg was heard in the Pretoria High Court last week.

The two cases could be a gamechanger in how municipal tariffs are determined.

City of Cape Town mayor Geordin Hill-Lewis has written to Salga saying the proposed redesign completely undermined the critical imperative by effectively making Independent Power Producers’ energy prices uncompetitive with the failing Eskom generation fleet’s “new” energy price.

Eskom group executive for distribution, Monde Bala, said the tariff restructuring was aligned to the unbundling process at Eskom.