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Last Friday Nersa announced Eskom's double application for tariff increases.

The first application relates to a backdated claim for a shortfall of R21.6bn for the 2017/2018 years, Eskom declaring below budget electricity sales revenue as the major component of this claim. An initial target included in Eskom's MYPD3 application of 2013, shows a sales overestimate of a whopping R118bn - an amount they are now seeking to recover through increased tariffs. Such miscalculations validate how Eskom’s unscientific thumb-suck behaviour is holding SA to ransom.

The second claim relates to Eskom's three-year budget wherein they claim they are actually entitled to a 90% tariff increase according to the Multi-Year Price Determination, a methodology which Ted Blom from EECO.CO.ZA has questioned for years.

Eskom then tones down its claim in an apparent bid to “accommodate South Africa” by curbing this application to three increases of only 15% per annum.

Blom will again raise the issue of a defective MYPD methodology, as well as lack of transparency into Eskom RAB (Regulated Asset Base) which in the current application is the key driver of the escalation in Eskom tariffs. The RAB escalated by more than R600bn due to a revaluation of Eskom assets by an unnamed “Expert”. Nersa had previously agreed with Blom that this valuation process had to be far more transparent and detailed, an agreement ignored by Eskom.

“This stubborn behaviour by Eskom proves it is still captured" states Blom, "albeit now by another third force outside the Guptas. We will be rallying the public to put a halt to all these corrupt increases. The regulations are clear - only an efficient utility qualifies for increases, not a corrupt entity bloated with 35 000 excess staff who sit and do nothing day after day at massive salaries, four times higher than Global averages". Blom insists tariffs will drop by more than 50% if corruption is eradicated - and he is calling for assistance to make this happen.

Implementation of this “New Dawn” at Eskom will ensure the utility dies within the next year, and South Africa with it. Blom urges concerned consumers to register a complaint against these two absurd applications via the EECO.co.za website.

Issued by Ted Blom

Partner: Mining & Energy Advisory and Energy Expert Coalition (EECO) Contributor