More to it than just a tariff hike

ESKOM went to court this week to get an order forcing the National Electricity Regulator of South Africa (Nersa) to allow it to hike its tariffs, breaking an agreement that set agreed increases until March 2022.

The reason Eskom did this was because Nersa deducted the government’s R69 billion bailout from the utility’s approved revenue for the current period. It did so because it wasn’t prepared to subsidise Eskom’s incompetence and maladministration.

Eskom argued in court that Nersa was effectively giving the consumer a subsidy – at its expense, which is a bit of a cheek since the consumer would have paid for it through taxes.

It’s a fascinating case – and from the perspective of the long-suffering consumer, Nersa appears to be doing a brilliant job.

For too long, we have been held hostage to Eskom as the sole supplier to the national grid. This is not just patently unfair, it’s unsustainable.

There has been no action against the parastatal managers who have placed us in this predicament – and certainly no urgency on the part of the Department of Minerals and Energy to free up the playing fields to allow independent power producers into the mix, which would resolve the load shedding crisis, but weaken Eskom’s death grip on the economy and our purses.

Simply put, Eskom is an albatross around the entire country’s neck, it can’t do what it is supposed to, it is far too expensive and overstaffed and is so in debt it is probably the biggest risk to the nation’s balance sheet as a sovereign nation.

We are told we cannot allow it to fail, but there are neither consequences for it failing us nor proper plans to address the shortcomings, because it is the crown jewel of state capture.

This week, the court reserved judgment. What it ultimately decides will have far greater ramifications than just a 16% tariff hike.