Business unites against Eskom’s bid to claw billions back from consumers

Business chambers from around the country have joined forces to push back against Eskom’s attempt to claw back R27bn from consumers to cover costs incurred in the 2018/2019 financial year.

The business leaders have come up with several recommendations which they believe are better than placing the burden of the faltering state power company’s cash flow problems on consumers.

Nelson Mandela Bay Business Chamber CEO Nomkhita Mona said in a statement on Thursday that chambers of commerce from around the country were presenting a united front on the issue.

“Through resilience and thought leadership we have developed a list of recommendations we believe will serve as a better alternative to the RCA [Regulatory Clearing Account] application that is deeply flawed.

“These recommendations are more likely to have a fundamental impact on stabilising and creating a sustainable economic future for business in respect to electricity,” Mona said.

The recommendations from business include:

• Eskom’s tariffs must reflect the cost of an efficient utility;

• Further measures must be implemented to increase electricity availability;

• Extend self-generation to all sectors of SA with the ability to inject power back into the grid;

• Create a free-market economy for energy from independent power producers (IPPs) as opposed to Embedded Power Producers, on an urgent basis, without any red tape;

• Eskom must get on top of unplanned plant breakdowns which lead to expensive use of diesel to produce electricity;

• Municipalities must reduce cost pressures on consumers through municipal tariffs;

• The government must implement measures to attract large power users that will allow Eskom and industry to grow.

The National Energy Regulator of South Africa (Nersa) has been holding public hearings around the country on Eskom’s latest RCA application.

The regulatory clearing account is a tracking mechanism that compares certain uncontrollable costs and revenues assumed in the multiyear price determination for Eskom with actual costs and revenues incurred by the power producer.

The final Nersa hearing will be in Johannesburg on Friday, when organised business will have its say.

Mona said the Nelson Mandela Bay chamber welcomed the appointment of new management at Eskom and would support innovation and structured recovery of the business.

However, she said: “We feel that in order for these recommendations to succeed, there needs to be minimal interference from political structures.”