ELECTRICITY TARIFF HIKES
HILARY JOFFE: Eskom’s death spiral needs drastic action
We "are selling less. Our costs are increasing. Therefore the customer must cover the revenue shortfall." That was the crisp summary of Eskom’s tariff application in the words of the Helen Suzman Foundation’s Anton van Dalsen. As he pointed out when he made his presentation at the National Energy Regulator of SA’s (Nersa’s) public hearings this week, no other business would operate like that. And the consistent, clear message from the hearings is that Eskom’s business model is broken. So too is the regulatory model that requires Nersa to give Eskom the revenue to cover its allowable costs plus a return on its assets. The demand from Business Unity SA, the Energy Intensive Users Group and others, as well as from civil-society groups such as the Helen Suzman Foundation, is that Nersa itself needs to step up to the plate. It needs to insist not just that proper governance and competent management be installed at Eskom, but also that Eskom undertake the radical surgery that is required ...
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