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Ted Blom doubts usefulness of Nersa hearings

Jan 28 2016 06:36
Dane McDonald

Cape Town – The National Energy Regulator of South Africa (Nersa) hearings have been “bitterly disappointing” and “have not worked”, an energy analyst said on Wednesday.

“I have reviewed the outcomes of the Nersa hearings that I have testified at since 2009, and if we are going to be honest, the results have been bitterly disappointing as will be gauged when one examines the records of decision,” energy analyst and spokesperson for the new OUTA (Organisation Undoing Tax Abuse) Ted Blom said.

Eskom has applied for a R22.8bn adjustment for its 2013/2014 financial year. If this is granted, it is expected to lead to a tariff hike of at least 16%, the City of Cape Town told the panel at the Cape Town leg of the hearings.

The RCA application by Eskom is for cost recovery and revenue adjustments based on actual past variances and not a revenue application based on future estimates.

Blom claimed that Nersa decisions had “blessed Eskom with over 700% price increases since 2007” and that it was clear that hearings had not worked and people had not been heard.

Blom will add to the string of industry role players who have already testified at the Nersa hearings next week in Johannesburg as part of the regulator’s current series of public hearings into Eskom’s application for a tariff hike.

READ: Eskom hits back as opposition to tariff hike grows

Last Friday, a group of around 30 people disrupted the Durban leg of the public hearings, where they held up placards stating “Eskom you are greedy” and “Stop the coal use”, while shouting “Eskom must fall”.

Blom is an ardent supporter of solar energy as an alternative to coal and other non-renewable energy sources.

According to Blom new solar (household and business) can be installed in days/weeks at very affordable prices and the payback is shorter than three years. Thereafter the electricity is free for up to 25 years.

“My estimate is that Eskom will be applying for another R80bn price clawback in the next 24 months (vs R22bn now) which will effectively require another 32% plus price increase before 2018.

"That will be on top of further operational cost increases in coal and transport - two cost elements Eskom have not shown in the past it can control and which increased by average of 20% plus year-on-year,” he said.

Johannesburg hearings will take place in Midrand at the Gallagher Convention Centre from 4-5 February 2016.

nersa  |  outa  |  eskom  |  electricity  |  tariffs


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