Consumers are penalized for Nersa power tariff errors

The DA asked the auditor-general to conduct an annual review of the National Energy Regulator’s (Nersa) determination of electricity prices after it came to light that the regulator made several “errors” with Eskom tariffs.

“According to reports, Nersa has dropped its opposition in two court cases against Eskom and admitted that it made mistakes in calculating tariffs that cost Eskom billions of rands in revenue,” said Kevin Mileham, the DA’s spokesman on energy.

In a court case, it has already been ruled that Nersa made errors in his calculation and the fourth case involving the regulator and the power supply is likely to follow the same route.

Mileham warns that Nersa’s mistakes will cost South Africans dearly.┬áHe says Nersa’s processes have become far too bureaucratic and cause mistakes like these.┬áConsumers will usually have to pay for their mistakes.

“Should we believe that this was Nersa’s only fault, or will this state of affairs open the door for a review of all Nersa’s pricing terms that will lead to further increases?” said Mileham.

Many South Africans are already struggling to afford current power tariffs. Due to the Covid-19 pandemic and the accompanying nationwide state of total seclusion, the economy is on a downward path, unemployment rates have risen to a record 30% and many businesses are closing their doors permanently. In addition to these problems, Eskom is now talking about a 15% price increase to try to recover the losses suffered by Nersa’s mistakes.

Mileham said South Africa needs an independent electricity management operator now more than ever, as the DA suggests in its private bill. This proposal is currently before Parliament.

Mileham says it will level the playing field by creating an independent network operator that could buy power at market-related prices from any generation source – including Eskom.

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