With load-shedding closer to being a thing of the past, electricity & energy minister Kgosientsho Ramokgopa is focusing his attention on protecting the poor from expensive electricity.
Ramokgopa told the Sunday Times this week that he is busy amending the electricity pricing policy to include a mechanism to protect South Africans from unreasonably high tariff increases.
The National Energy Regulator of South Africa (Nersa) last week granted Eskom a 17% increase — less than half the 36% the power utility wanted.
Ramokgopa said the policy that guides Nersa on the pricing of electricity is silent on mechanisms that can protect the poor from tariff hikes.
This, he says, is something he intends to change, preferably by the end of the year.
Ramokgopa did not disclose the wording he wants to use in the amendment, but the Sunday Times understands that it may be along the lines that electricity price increases must not be above the inflation rate.
“Tariffs are a function of policy, so our view is that we must tamper with the policy. The policy must talk to how you protect the poor, how you structure the negotiated price agreements... The big users of electricity have a different regime of tariffs and the law agrees that they can negotiate with Eskom, but it must get concurrence from Nersa.
“The ANC says the government must review electricity pricing policy and by extension they say I must do it, which is the work that we have been doing. And once we determine that policy then Nersa follows what the policy says.”
Although the electricity pricing policy refers to affordable electricity tariffs for low-income consumers, it is not clear on the details.
The absence of policy clarity means Nersa has the sole power of determining what it deems affordable or not.
Ramokgopa has identified this as a problem, as consumers are at the mercy of Nersa.
What Nersa does is what the policy says. So if we are aggrieved about the tariffs, change the policy and Nersa will change the equation
— Kgosientsho Ramokgopa, electricity & energy minister
“The electricity pricing policy must provide the necessary protection to the poor... And then Nersa will use the mechanism of a tariff to give effect to policy.
“What Nersa does is what the policy says. So if we are aggrieved about the tariffs, change the policy and Nersa will change the equation.”
He said he would soon make the revised policy available for public participation. Once approved, the policy would be clear for Nersa to follow when determining electricity price increases. If left unchecked, unaffordable electricity would soon become the biggest challenge facing the country and consumers.
Ramokgopa said he was confident that load-shedding and load reduction would very soon be completely dealt with, but he was now worried that electricity would be available in abundance but consumers would be unable to buy it.
“For me the legacy of the department — of course solving load-shedding, load reduction — but the biggest issue is the electricity pricing policy. We will resolve load-shedding, I’m confident, we will resolve load reduction, but the biggest problem you are going to have is the price of electricity.
“Go to Europe, go to America, anywhere in the world today, the biggest issue is not whether electricity is available, they don’t have generation challenges, they have a price challenge. That’s the biggest issue that’s going to face us. Eskom will be fine, electricity will be on, the other power producers will be there, but the consumer will not be able to pay. That’s the biggest problem.”
President Cyril Ramaphosa announced at last year’s state of the nation address that he would appoint a minister who would focus solely on dealing with electricity issues and ending load-shedding.
A year into the job, Ramokgopa lauded Ramaphosa for the decision to appoint someone dedicated to the country’s energy problems — even if it was not him.
He said the decision had led to various green shoots in the power utility’s energy availability factor and the country was much closer to completely ending load-shedding, despite the setback last weekend where Eskom had to quickly implement stage 3 load-shedding to replenish diesel tanks.
Before that, the power utility had racked up an impressive 10 months without load-shedding. Ramokgopa said he would have loved to reach a year without power cuts.
“Yes it’s a setback, I would’ve wanted to say a year without load-shedding. We are moving in the right direction and that’s why it took us, I think, 29 hours to fill the tanks and then get the system going. And we are not even using that diesel because the system is performing very well,” said Ramokgopa.
“So you are going to have these dips ... when we get Kusile unit 6 synchronised this month and next month Medupi unit 4, which was damaged by fire about four years ago, then we are going to have a completely different conversation. So we are moving in the right direction. Of course no one wants load-shedding, I don’t want it, we were disappointed, but we are moving in the right direction.”
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