Electricity and energy minister Kgosientsho Ramokgopa’s office has confirmed that he has suspended Nersa full-time regulator member for electricity Nhlanhla Gumede.
The suspension was “pending the outcome of an independent enquiry”, spokesperson Tsakane Khambane said on Monday morning. “The minister is applying himself to an acting appointment and will announce once that nominee has been approached and accepted.”
The energy regulator’s chair, Thembani Bukula, said Nersa’s full-time member for piped gas, Nomfundo Maseti, would be in the acting role.
Gumede’s suspension comes three months after he, in an interview with Sunday Times, blamed Nersa itself for high electricity tariffs, because it used an inappropriate methodology based on outdated legislation.
That prompted the regulator to issue a media release distancing itself form Gumede’s utterances.
“Nersa distances itself from the contents and views expressed by Mr Gumede as they do not represent the energy regulator’s interpretations and decisions in the performance of its mandate relating to regulating the electricity industry. The views expressed in the article remain Mr Gumede’s personal opinion,” the regulator stated.
Nersa further failed to change the way it determines municipal tariffs despite a 2021 court ruling that declared its methodology unlawful. As a result AfriForum obtained a court order declaring its approval of this year’s increases in municipal tariffs unlawful.
The electricity supply industry is rapidly transforming and Ramokgopa has criticised it for not being proactive. Other role players have gone as far as calling Nersa a stumbling block.
The regulator must in the next few months decide on Eskom’s allowable revenue, its proposed new tariff structure and the tariffs that will be implemented on April 1.
It will also be crucial to the implementation of the Electricity Regulation Amendment Act that has been signed by President Cyril Ramaphosa with the promulgation in the Government Gazette pending.
Meanwhile, Eskom said on Monday that the more than R90bn ($4.96bn) towns and cities owed it in unpaid debts risked wiping out its government bailout, as it argued for tariff hikes.
The government has insisted a three-year debt-relief package worth more than R250bn promised by the National Treasury last year is the power utility’s last.
Eskom’s CFO made the comments on the first day of public hearings into the company’s application for electricity tariff hikes over the next three years.
Eskom has asked the energy regulator to approve tariff increases of about 36% from April next year, 12% in 2026 and 9% in 2027, prompting criticism from political parties and civil society groups worried about the effect on economic growth and communities struggling to make ends meet.
“For Eskom to be financially sustainable ... this tariff decision is a key ingredient, but not the only ingredient,” said Calib Cassim, adding that debt owed by municipalities and large cities was growing by R1bn-R1.5bn a month.
“The debt relief that we’ve got from government and National Treasury will be neutralised if this continues to increase,” he said.
Eskom, which has been known for the perilous state of its finances and regular power blackouts for more than a decade, has this year staged a dramatic turnaround in electricity supply from its coal-fired power stations. The country has not had scheduled power cuts for eight months.
Eskom submits electricity tariff applications to Nersa, which consults the public before deciding whether to approve an increase. It rarely grants Eskom the full increase sought.
The DA, which governs the City of Cape Town and is a coalition partner of the ANC at a national level, staged a small protest outside Monday’s public hearing.
“It is unfair, it is unaffordable and it is outrageous,” Cape Town mayor Geordin Hill-Lewis told protesters as DA supporters waved placards reading “Nersa don’t let Eskom bleed us dry” and “Eskom is taking food off our table”.
With Reuters
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