John Steenhuisen at a DA manifesto launch at Rand Stadium in Johanneburg on 23 February 2019. (Photo: Gallo Images / Netwerk24 / Deaan Vivier) The DA wants the review to include the legality of the decision to implement rolling blackouts.
The party’s case is one of several relating to the energy crisis, including one where the government must respond by Friday to a legal demand to immediately stabilise the electricity grid (effectively stopping rolling blackouts) or explain why it cannot be done.
The DA has asked for a hearing on 7 March to stop the increases, and again on 9 May for the legal review of the way the government has handled the crisis.
In his affidavit, party leader John Steenhuisen said they believe the government’s response to the situation was unconstitutional since it failed to avert an energy crisis and failed to act reasonably.
“Government consistently failed to provide a clear plan,” he said.
The DA will also ask for a ruling on whether load shedding can legally be implemented.
“Eskom lacks the authority to impose load shedding,” he said.
“The decision is unrelated to consumption or demand. It is a knee-jerk reaction to generation issues. It is not some temporary evil people are expected to endure while government addresses the energy crisis,” he added, explaining that it has become a primary tool to prevent the collapse of the grid.
Eskom and the government have repeatedly failed to opt for alternatives, Steenhuisen said.
“As the crisis worsens, nearing a seemingly inevitable ultimate collapse of the South African energy system, the severity of the limitations worsens too.”
‘Irrational’
He described the National Energy Regulator’s (Nersa) decision to increase electricity tariffs by 18.65% from April as irrational as it “linked an entity in dire financial circumstances to recover more funds from customers”.
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“Nersa expects consumers to pay more to an entity that has a debt of close to R400-billion, with no clear roadmap to financial stability or recovery.”
The premise, he said in his affidavit, that an increase in tariffs will improve Eskom’s finances, is flawed:
“Eskom cannot be saved by an increase in tariffs. Without significant structural reform, Eskom is a lost cause that cannot be saved or in any way assisted by making electricity customers pay more.
“Making customers pay more – while Eskom will only provide less and less electricity and will incur more and more debt – is patently irrational.”
Eskom’s debt currently sits at R396.3-billion.
Nersa has not provided reasons for its ruling to allow the increase.
Steenhuisen said the ruling effectively allows for a 30% increase in electricity tariffs over two years. This, he added, was done without taking steps to ensure that those relying on the subsidy can continue to receive electricity, and would lead to the indigent being cut off and small businesses and municipalities being unable to afford electricity.
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“Millions will suffer an interruption to their access to electricity,” he added.
Steenhuisen argued that the Nersa decision did not consider the impact of the increases on vulnerable people, and also failed to consider Eskom’s latest financial statements, cost assumptions and the energy availability factor for its plants.
The regulator had also failed to consider Eskom’s actual cost of supplying electricity, and fluctuations in the price of coal, as well as possible cheaper alternatives, including renewable energy.
Eskom had filed two applications with Nersa for an increase.
Steenhuisen pointed out that Eskom’s second application was defective because it left out critical data and provided no explanation for a significant alteration in projected costs. The utility had also failed to provide the energy availability factor for its power stations.
“[Nersa] irrationally licensed an entity in dire financial circumstances to recover more funds from customers,” he continued.
He said irreparable harm will be done if the increases are implemented.
Steenhuisen added that Stage 6 blackouts were costing the country R4-billion a day and could be responsible for a drop of 0.6 percentage points in South Africa’s gross domestic product.
The DA leader said Eskom tariffs had increased by 653% since 2007 – they had irrationally abandoned their policy of a general subsidy for electricity tariffs, which would lead to several socioeconomic rights being infringed.
He said indications are that South Africa will have 49 weeks of rolling blackouts in 2023. DM/MC