Electricity costs to come under scrutiny

Minister in the Presidency Khumbudzo Ntshavheni said on Thursday as a Cabinet committee dealt with the cost of living implications for citizens, it would have to engage not only the National Energy Regulator of South Africa’s (Nersa) tariffs, but also the cost of electricity.

Addressing a Cabinet post-briefing, Ntshavheni said it was not ideal to have exorbitant tariffs in the current environment.

Eskom has submitted to Nersa a revenue application asking for a 36.15% price hike in electricity for 2025/26.

“In this current environment, it is not ideal to have exorbitant tariffs. It is not just Cabinet supporting municipalities,” she said.

“There are ministers who are working on the cost of living adjustment. We started on the fuel, but part of the extension of that work is to cover electricity and other areas of impact,” she said.

Professor Mark Swilling of Stellenbosch University’s School of Public Leadership said the cost of electricity was becoming increasingly expensive.

“Nersa and Eskom are at loggerheads and in some ways there seems to be exorbitant increases in what users pay. That is a serious concern,” he said.

Ntshavheni also said the government would defend the newly enacted Electricity Regulation Amendment Act that was signed by President Cyril Ramaphosa.

“The Electricity Regulation Amendment Act has become law as soon as the president signed it. If there are legal challenges the government will be ready to go to court to defend the law,” she said.

According to Ntshavheni, the signing into law of the Electricity Regulation Amendment Act created a new era of a competitive and sustainable electricity sector that meets South Africa’s energy needs.

“The amendments enhance energy security by drawing in more participants into energy production,” she said.

She noted that the country’s energy security has also been further strengthened with an additional 2 500 megawatts of electricity that will be fed into the national grid at the end of September 2024.

“The additional capacity which will come from Medupi Unit 4, Kusile Unit 6 and Koeberg Unit 2 will place the country firmly on track to reach the milestone of 150 days without load shedding.”

Ntshavheni also said the milestone of 148 days without load shedding has been achieved with the reduction in the use of diesel, resulting in R10.21 billion savings in the cost of diesel compared with the same period last year.

“When we started (saying) that there will be no load shedding, the government was accused of diesel spending to try to campaign. One hundred and forty-eight days without load shedding was never a ruse.”

She said the work by the National Electricity Crisis Committee was bearing fruit.

Ntshavheni added that the Cabinet has noted the withdrawal of the determination for the procurement of new nuclear energy generation capacity by the Minister of Electricity and Energy, Kgosientsho Ramokgopa, to allow for further public consultation.

“Cabinet affirmed that nuclear energy remains part of our country’s energy mix as it offers a low-carbon, reliable source of electricity that can contribute significantly to the country’s energy security and climate goals.”

Cape Times