noted<\/a><\/strong> that the process also excludes the usual in-person public hearings, which are typically used to test and challenge complex tariff decisions.\u00a0<\/p>\n\n\n\nAdditionally, the consultation paper effectively shifts responsibility onto the public. Cruise said that the document appears designed to justify why Eskom could be owed even more than previously expected, moving the figure from R54 billion to as much as R76 billion.<\/p>\n\n\n\n
\u201cI read every word of it to wrap my head around what\u2019s going on,\u201d he said. <\/p>\n\n\n\n
According to Cruise, Eskom argued that NERSA had incorrectly failed to account for about R107 billion in depreciation and other costs when applying its own multi-year price determination methodology.<\/p>\n\n\n\n
Eskom correctly identified that NERSA had not followed the methodology it had itself set out. Cruise said that both NERSA and the High Court later confirmed that mistakes had been made.<\/p>\n\n\n\n
Following this, NERSA and Eskom entered into behind-the-scenes negotiations and settled on R54 billion, before AfriForum and the Minerals Council intervened. <\/p>\n\n\n\n
\u201cThey said this is heavily impactful on the public and it needs to go through a public participation process,\u201d he explained. <\/p>\n\n\n\n
That intervention has now reopened the issue, with the revised figure rising even further. Breaking down the R76 billion, Cruise said around R62 billion relates to depreciation, which he described as particularly worrying. <\/p>\n\n\n\n
\u201cThis is the depreciation of assets like power stations,\u201d he said, adding that many of these plants were built at costs three times higher than initially budgeted.<\/p>\n\n\n\n
He warned that these inflated costs are now \u201cbiting us\u201d and have been a recurring issue for more than a decade. <\/p>\n\n\n\n
\u201cFor the last 15 years, Eskom has been telling NERSA they\u2019re not calculating depreciation correctly,\u201d Cruise said. <\/p>\n\n\n\n
\u201cOne would think after 15 years, NERSA would have gotten it right, but it seems like we\u2019re still getting it wrong.\u201d<\/p>\n\n\n\n
A further R12 billion relates to returns on Eskom\u2019s asset base, which Cruise said again highlights weaknesses in regulation.<\/p>\n\n\n\n
Asked what this says about NERSA\u2019s role, Cruise said feedback from industry experts suggests the regulator is struggling. <\/p>\n\n\n\n
\u201cThey\u2019re understaffed and under-facilitated to perform the function they\u2019ve been given,\u201d he said. <\/p>\n\n\n\n
That function, he stressed, is to prevent electricity prices from escalating excessively and to protect the economy from Eskom\u2019s repeated requests for steep increases.<\/p>\n\n\n\n
\u201cThe regulator is meant to regulate and, in some sense, punish Eskom for excessive spending,\u201d Cruise said. <\/p>\n\n\n\n
\u201cEskom can\u2019t just ask for all the money it\u2019s wasting to be recouped from electricity payers through tariffs.\u201d<\/p>\n\n\n\n
However, he added that Eskom routinely pushes back, arguing it is owed the money regardless.<\/p>\n\n\n\n
Cruise warned that the outcome of the consultation could have immediate consequences. <\/p>\n\n\n\n
\u201cCome 1 April, whatever tariff increase is agreed to will come into effect,\u201d he said, with Eskom customers paying from April and municipal customers from July.<\/p>\n\n\n\n
If the R76 billion is approved, Cruise said electricity tariffs could rise by around 10% to 10.5% this year and next, compared with about 8.8% under the earlier R54 billion proposal.<\/p>\n\n\n\n
That would mean average increases of around 15% a year over five years. <\/p>\n\n\n\n
Without the additional R76 billion, Cruise noted that the tariff increase for 2026 would have been just 5.36%.<\/p>\n\n\n\n
He also warned that relief measures for energy-intensive industries would ultimately shift the burden back onto ordinary consumers.<\/p>\n\n\n\n
\u201cIf Eskom is told to sell power cheaper to the steel industry, they\u2019ll simply recoup that money from the rest of electricity payers,\u201d he said. <\/p>\n\n\n\n
\u201cUnfortunately, it comes back to households and businesses that are already under severe strain.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Electricity consumers face another sharp tariff shock if proposals now before the energy regulator are approved.<\/p>\n","protected":false},"author":92,"featured_media":716870,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9874],"tags":[1164,24470,2006,853],"class_list":["post-847851","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-eskom","tag-impower-solar","tag-nersa","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/847851","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=847851"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/847851\/revisions"}],"predecessor-version":[{"id":847894,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/847851\/revisions\/847894"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/716870"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=847851"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=847851"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=847851"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}