Eskom tariff decision quietly postponed

The National Energy Regulator of South Africa (Nersa) has quietly postponed its final decision on Eskom’s application for a 53% tariff hike to June 18.

By Thursday the regulator had not yet posted notice of the change in its decision date on its website, despite the conclusion of this week’s public hearings into the proposed tariff increases.

Financial daily Business Day quoted Nersa member Thembani Bukula as saying the decision was postponed because of the record 380 submissions received.

While the postponement may mean little to consumers who are bracing themselves for the worst, it may have further effects on the economy.

The South African Reserve Bank’s monetary policy committee (MPC) meets on June 11 and 12, when it will make its next interest-rate decision. By moving the final decision forward by seven working days, Nersa has ensured that the MPC will not know the outcome when it meets.

“We are in extraordinary times, which require extraordinary leadership, decisive action and making sure we can deal with the things we need to deal without petty politics,” said Eskom CEO Jacob Maroga, at a Mail & Guardian Business Breakfast presentation on Thursday.

“The impact of a weak power system to the country is serious and it is going to require some serious discussion. Let’s cut the politics and deal with this thing decisively from all angles,” he said.

Eskom has been in the firing line since the January threat of a nationwide power failure, but few have noted its transparency and willingness to deal with the colossal challenges that lie ahead.

Admitting that South Africa is still in the midst of a deep power crisis, Maroga stressed that what Eskom requires most is a regulatory framework mechanism that will enable it to deal with the challenges it is facing.

The crisis is characterised by tight reserve margins, which drive up cost. It is also marked by a period of massive capital expansion, and both these factors bring volatility to the forecasting of costs. A regulatory mechanism would smooth out the costs and make it easier to plan for the next decade.

Maroga said it is time for policy, regulation and planning to merge. “The issue of combining of policy, regulation and planning in the power sector is an issue that I think requires much more clarity, alignment, integration and single accountability,” he said. — I-Net Bridge

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Sherilee Bridge
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