A Free State farmers’ organisation has backed Nersa, Mzansi’s energy regulator, in its opposition of Eskom’s high court application to review its Regulatory Clearing Account (RCA). This, after Nersa called on interested stakeholders to join them in opposing the review application.
Eskom wants the court to review and set aside Nersa’s approval of a R13-billion RCA balance, and the regulator’s decision to grant Eskom’s supplementary revenue balance of R1.2 billion. Both are in respect of the 2018/19 financial year.
“The court decision in Eskom’s favour to increase prices way above inflation will definitely affect the agricultural sector negatively with repercussions through increased food prices and job losses,” said Free State Agriculture (FSA) president Francois Wilken.
Wilken confirmed that FSA presented their arguments to Nersa at all of the public hearings held in the Free State about Eskom’s application for tariff increases.
Farmers’ key arguments
At all of the hearings, FSA emphasised the following:
- The fixed cost component of accounts are unaffordable for farmers, particularly small-scale and family farmers which make up the majority of FSA’s membership. The organisation believes they should be exempted from the increases.
- The consumer does not have to bear the brunt for Eskom’s bad planning decisions. This, said Wilken, while “expecting higher energy sales while increasing load-shedding and forcing consumers to install own energy solutions, back-up power and energy savings technology. All this forcing Eskom into a downward utility spiral.”
- As price-takers, the agricultural sector not only face Eskom price increases that are higher than inflation, but also in labour costs through the national minimum wage, and increasing fuel costs through fuel taxes. “All [of] this making certain production energy [and labour] intensive enterprises unviable leading to job cuts from the sector and food price inflation in the longer run,” argues Wilken.
- Also, FSA believes that blatant corruption that took place under Eskom’s watch should not reclaimed and paid for by the consumer.
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