Intensive energy users welcome regulator’s decision

January 8th, 2018, Published in Articles: Energize

The Energy Intensive User Group (EIUG) has welcomed the decision made by the National Energy Regulator of South Africa (NERSA) on Eskom’s revenue application for the 2018/19 financial year 15 December 2017. Eskom funding model resulting in tariffs having to be increased exorbitantly to fund internal inefficiencies is outdated and unsustainable. It is hoped that by limiting the increases allowed to Eskom, as NERSA has done, will force Eskom to focus on efficiencies and restoring corporate governance. During the public hearings, the EUIG strongly argued to NERSA for a CPI increase and we are pleased that NERSA granted only 5,23% instead of the 19,9% as sought by Eskom. While the decision brings short terms relief to intensive-electricity users, industry is looking for electricity price certainty to enable planning. In order to achieve this sustainable future, the EIUG continues to advocate for a new electricity supply model, wherein Eskom is but one of the electricity suppliers of choice. In the short term, we are very concerned about Eskom’s immediate liquidity challenges, the initial reports of a stand-off with a serious concern. We hope Eskom will take visible action to act against allegations of corruption, establish investor confidence and avoid an unqualified audit for 2017. The shareholder needs to act swiftly to manage this single biggest risk to the economy.

Contact Piet van Staden, EIUG, Tel 011 344-2761,