LETTER: Eskom’s tariff hike shows lack of understanding of the reality facing consumers

Eskom’s recent statement responding to the tariff increases approved by energy regulator Nersa acknowledges that these will put financial pressure on consumers.

The power utility noted that the higher electricity tariffs will contribute positively to Eskom’s financial and sustainability efforts, but it is unclear how this aligns with the burden placed on consumers. Additionally, while Eskom acknowledges the need to address the generation capacity shortage and improve its energy availability factor, it is not clear how it plans to do so, beyond relying on the burning of diesel.

It is also important to note that Eskom is awaiting the reasons for Nersa’s decision and it is uncertain how this will address previous court judgments on related matters.

It is disheartening to see Eskom once again apologising for load-shedding, though this issue has been ongoing for years. The fact that it is apparently the “highest priority” for the organisation is not reassuring to those who continue to suffer the consequences.

This suggests that the financial pressure being placed on consumers as a result of Nersa’s decision is being brushed off as a necessary step for Eskom’s financial and sustainability efforts, without any consideration for the impact it will have on individuals and businesses.

While it has been highlighted that Eskom and Nersa are aligned in their efforts to improve the energy availability factor, there is no clear plan or action being taken to address the root causes of the shortage in capacity, such as the delays in independent power producer (IPP) projects and Eskom’s own plant performance issues. The use of diesel is also not a long-term solution, and it is not clear how this will address the underlying issues.

It is concerning that Eskom is awaiting the reasons for Nersa’s decision and hoping that previous court judgments on related matters have been addressed, rather than taking proactive steps to ensure it is in compliance with these regulations. Overall, this statement feels like a lack of accountability amid a continued lack of real solutions to the ongoing problem of load-shedding.

Another major concern with Eskom’s statement is the lack of transparency regarding the significant increase in revenue determinations for the 2024 and 2025 financial years, from R319bn to R352bn. This increase represents a significant burden on consumers, who are already struggling with the financial pressures caused by load-shedding.

It is not clear from the statement how this increase will benefit the public or address the underlying issues facing Eskom. It seems like yet another attempt by the organisation to pass the financial burden on to the public, without taking responsibility for its own mismanagement and inefficiencies.

It is not acceptable that Eskom seems to be relying on Nersa to bail it out of its financial troubles instead of taking concrete steps to address its shortcomings. Consumers should not have to bear the cost of Eskom’s lack of planning and execution.

The lack of transparency and accountability on the part of Eskom regarding this increase in revenue determinations is unacceptable. The public deserves to know how their money will be used and how it will benefit them, rather than being thrown into a black hole of mismanagement and inefficiencies.

The statement by Eskom CFO Calib Cassim is deeply concerning and shows a lack of understanding of the reality facing SA consumers. Cassim’s assertion that the new revenue determination will allow a “further migration towards a price level that reflects the efficient cost of producing electricity” is highly questionable. Eskom has a history of financial mismanagement and inefficiencies, and it is not clear how this increase in revenue will address these issues or benefit the public.

Furthermore, Cassim’s claim that this decision will positively contribute from a financial and sustainability point of view is not supported by any concrete evidence or plan of action. The public has no way of assessing the validity of this claim and it seems an attempt to justify the increase in revenue determinations without addressing the underlying issues.

Cassim’s statement is a clear indication of Eskom’s disregard for the reality facing SA consumers and their lack of transparency and accountability. The public deserves better.

Ronnie Siphika
CEO, Construction Management Foundation

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