Eskom proposed tariff increase will 'kill SA economy', says energy expert

As reported by SABC, energy expert Ted Blom "raised concerns over Eskom's continuing financial losses". He explained that the power utility's actions will result in an increase in electricity tariffs.


The increases, in turn, will have a negative impact on the South African economy.


This follows after the power utility said back in June that it "welcomes the High Court Decision that allows for phased recovery of the R69 billion equity injections". Eskom said in a statement back in June".


"The judgment requires Eskom to recover the R69 billion, in a phased manner over a three-year period. Prior to the court hearing, NERSA was in agreement that the deduction of the equity injection was not correct in terms of its MYPD methodology. The judge was required only to make a decision on the recovery of the equity".

Eskom vs NERSA court ruling


As reported at the time, the decision means that Eskom can now attempt to claim back double that amount. This may lead to higher tariffs as the financially embattled company seeks to gather R66.6 billion in regulatory clearing account (RCA) submissions.


Read more here — Eskom win High Court appeal against Nersa – can now claim higher tariffs


NERSA, however, is now preparing to appeal the High Court's decision. Speaking to SABC, Blom said Eskom "is going to kill this economy" and further contribute to the power utility's "debt spiral".


"Eskom is on a journey to grab as much money out of the economy as they can. They already grabbed R1.3 trillion more than what they should have gotten in the last 12 years; notwithstanding new management who were supposed to clean up the organisation".

'Not everything is kosher here'


Blom said that "another revelation of another R14 billion of fraud and corruption within Eskom" came to light. "The regulator seems to want to clean up its act but I am not convinced that everything is kosher there".


Posting on social media, Blom said that the "first announcement about the R69 billion injection was labelled by both Eskom and Treasury as alleviation of tariff burden".


"Thereafter it was changed after collusion to 'Equity Injection'. Hence doubles the burden as Eskom tariff now increase 15% time three AND will increase taxes".

R1.4 trillion in losses


He also said that the "gravy at Eskom runs deep and wide", and added that it confirms what he had been saying at "numerous Nersa hearings since 2009, which Nersa has steadfastly refused to investigate"


"It also confirms my allegations that Eskom corruption and inefficiency has cost the public more than R1.4 trillion since 2007."


Eskom's next round of tariff increases are set to take place from April 2021.