Briefly SA News: OUTA states that Eskom deserves 0% increase because of fraudulent over-forecasting

The Organisation Undoing Tax Abuse (OUTA) has submitted its arguments against a proposed electricity tariff increase to national energy regulator Nersa.

The Organisation Undoing Tax Abuse (OUTA) has submitted its arguments against a proposed electricity tariff increase to national energy regulator Nersa.

OUTA has reportedly argued that Eskom deserves a 0% increase to its pricing for the next financial year because the power utility was guilty of fraudulent over-forecasting.

This comes after Eskom approached Nersa to request a 19.9% price increase for the 2018/2019 financial year.

Nersa is currently reviewing Eskom’s application. The energy regulator is also reviewing submissions from various stakeholders such as OUTA and the public and will take all of these into consideration before making its decision.

Briefly.co.za learned from Fin24.com that OUTA also noted that Eskom was currently embroiled in scandals and that the power utility could not be called an efficient operation. OUTA said that the South African economy and public could ill-afford to fund the captured state-owned enterprise.

Image credit: enca.com

OUTA maintains that Eskom’s forecasts which shows it will need a 20% increase per year for the next five years is nothing but a deliberate attempt at guaranteeing that Eskom receives a massive increase in income.

Nersa announced that Eskom had applied for a total allowable revenue of R219 billion for the 2018/2019 financial year which converts to a 19.9% price increase to consumers.

Submissions from interested parties and the public closed on Friday 13 October 2017. Nersa will hold public hearings during which time interested parties are invited to appear before it from 30 October to 17 November. The public hearings are set to start in the Western Cape and will conclude in Gauteng.

The energy regulator will then look at all the submissions and is scheduled to deliver its decision on 7 December.

Eskom has a terse history with Nersa and has on numerous occasions been refused their requested price increase. The energy regulator has often times granted price increases but at substantially lower margins than Eskom has applied for.

Energy experts agree that Eskom’s tactic has become to start high with the hopes of securing a lower increase.

Source: Briefly. South African News

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