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Tomorrow I will be meeting with Thembani Bukula of the National Energy Regulator (NERSA) to discuss how Eskom’s Multi-Year-Price-Determination (MYPD) 2 and 3 will operate. I will also show how proposed changes to current electricity legislation may have unintended consequences that impact negatively on the poor.

Affordable electricity for all South Africans is critical for small business creation, which creates the highest proportion of South Africa’s jobs and thereby alleviates poverty.

I will use the meeting with NERSA to get clarity on three important issues:

First, we want to know whether price increases for Eskom will continue to be granted at above-inflation rates and for how long. Both the Democratic Alliance (DA) and the Reserve Bank governor have been advocating for inflation-linked electricity tariff increases. The most recent round of price increases is still 10% higher than inflation, making electricity barely affordable to the poor.

Second, it is unclear whether Eskom will still attempt to include the capital expenditure costs for Medupi and Kusile power stations in MYPD3. South Africa needs clarity on this. The DA has persistently called for an alternative pricing model that will alleviate the burden on ordinary consumers who are already paying significantly more for their electricity than they were a few years ago. Current consumers should not be expected to fund future capital-expansion projects.

Lastly, the DA seeks assurance that proposed changes to the Electricity Regulation Second Amendment Act will not hurt the poor. Currently, NERSA provides national regulatory oversight for administered electricity prices. They recommend that municipalities – as distributors of Eskom power – charge no more than an 11.3% surcharge for electricity that they supply to their consumers. The DA wants assurances that the poor will remain protected from price spikes under new legislation proposing the devolution of pricing to local government level.

Poor South Africans spend a large proportion of their negligible disposable income on electricity. They cannot afford unregulated price hikes. The DA will therefore do everything in its power to ensure that the poor do not become more vulnerable to increasing electricity charges.