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Power crisis: Ramaphosa plans to switch off Eskom’s tariff hike

Power crisis: Ramaphosa plans to switch off Eskom’s tariff hike
President Cyril Ramaphosa addresses the Free State ANC provincial conference at Imvelo Lodge outside Bloemfontein on 22 January 2023. (Photo: Felix Dlangamandla)

Despite claiming he could not intervene in Nersa’s statutory process, the President said at the Free State ANC’s provincial conference that he had asked Eskom to suspend its plans to increase electricity tariffs by 18.65%.

President Cyril Ramaphosa seems to have changed his tune on the decision not to interfere with the National Energy Regulator of South Africa’s (Nersa’s) statutory process to approve Eskom’s 18.65% tariff hike for the 2022/3 financial year. He is now urging the power utility to stall the increase indefinitely.

Ramaphosa has been having back-to-back meetings about the country’s energy crisis, which is spiralling out of control with relentless blackouts. 

In his closing address at the Free State ANC’s provincial conference in Mangaung on Sunday, 22 January, Ramaphosa said he had approached Eskom about the increase. This comes barely a week after he claimed he could not intervene in the regulator’s “statutory process”.

“I have said to Eskom it will be an injury to our people if we implement this 18% increase now when we are going through load shedding,” he said, adding that he had asked Eskom to suspend it. “So Eskom is going to consider that.”

Read more in Daily Maverick: “Eskom gets tariff hike while Ramaphosa ‘deeply regrets’ Stage 6 rolling blackouts 

The President attributed South Africa’s energy challenges to Eskom’s inadequacies in attending to maintenance and to the delay in building new power stations. He acknowledged that this had negatively affected “the lives of our people”.

South Africa is short of about 6,000MW of electricity, according to Ramaphosa. He said the country had been making progress in unlocking the “logjams” in processes that would bring more power into the grid.

He empathised with the plight of frustrated business owners whose companies had been put in jeopardy, with some having to shut down.

On criticism that his meetings about the crisis had not borne fruit, Ramaphosa said the government was making every attempt to resolve the crisis.

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“We have been working very hard. We put in place an action plan that I announced last year in July, and the process of adding more capacity with various measures, be it renewable energy or even emergency energy, has been under way,” he said. 

His remarks came after the Democratic Alliance launched legal action against the government on Tuesday, 17 January, to fight the 18.65% electricity price increase that takes effect in April. An increase of 12.74% scheduled for April 2024 means a 33.77% hike in the next 16 months.

The DA says in court papers that electricity prices have increased by about 650% since 2007. Party leader John Steenhuisen said they would ask the court to declare as unconstitutional Nersa’s decision to allow increases in the next two years, as well as ongoing and repeated rolling blackouts.

Web of bureaucracy

Ramaphosa said it was “unfortunate” that building new power stations took a considerable amount of time. Eskom is focused on Kusile and Medupi power stations.

Daily Maverick has previously reported that emergency legislation would be tabled to get new power projects on to the grid as progress was being slowed by a “web of bureaucracy”, according to the National Energy Crisis Committee of Ministers. 

Read more in Daily Maverick: “Government plans to focus on six ailing power stations to resolve the electricity crisis” 

In addition to these measures, Ramaphosa said South Africa was also looking at bringing in more experts and engineers who had left Eskom to help rescue the country. 

The government, meanwhile, was also looking into buying power from neighbouring countries. Ramaphosa said he had been engaging with businesses that could help cut the red tape.

Read more in Daily Maverick: “DA heads to court to block 18.65% Eskom tariff hike amid rolling blackouts” 

Last week, Ramaphosa failed to win the support of a multiparty front to tackle the problem after meetings on Monday, 16 January. The EFF immediately issued a statement slamming plans to take co-responsibility for blackouts and co-create a solution.

Addressing the media on Sunday, Eskom chief operating officer Jan Oberholzer said load shedding would be ramped up to Stage 3 and Stage 4 this week.

Ramaphosa said: “To reduce those stages of load shedding … the interventions that I announced in July are taking effect.

Read more in Daily Maverick: “Ramaphosa’s ‘Energy Action Plan’ — how is it faring half a year later?

“We are now even making sure that there is sufficient diesel to power our two diesel power stations where we can get more power, more megawatts to be brought into the system while those power stations that have been taken out for maintenance and repair are brought back, one by one, so that we can then have power.” DM


Comments - Please in order to comment.

  • Franz Dullaart says:

    I suppose he was so “shocked” that he had to interfere.

  • Nicol Mentz says:

    Do I smell an election coming?

  • Alley Cat says:

    So where will the money come from if Eskom doesn’t implement the increase? Which tree is it upon which the money grows?
    This is pandering to the ANC voters… Cloud cuckoo land AGAIN!! This idiot always has grand plans that are never implemented and never have any substantive detail. How about answering “what, when, where and how instead of regurgitating platitudes and drivel?

    • Thinker and Doer says:

      Indeed, this sort of statement places Eskom in a completely untenable position. The tariff increase is certainly unaffordable to a substantial proportion of people, but government is not providing any other sources of support that Eskom could rely on if it delays the implementation of tariff increases. The National Treasury has refused to agree to sourcing emergency funding for diesel to at least dampen down the volatility and severity of the loadshedding, it has delayed for years in making a determination about potentially moving a significant portion of Eskom’s debt off of Eskom’s balance sheet, which would make Eskom operationally more viable. It also has failed to come up with a mechanism to assist Eksom to effectively recover the very substantial debt that is owed to Eskom by municipalities and Departments and other public entities, which has created challenges for Eskom’s financial position for many years, and it is unable to come up with a solution on its own, because it is prohibited from cutting off debtor municipalities. The government puts the kaibosh on any possible solutions that might assist Eskom. The government is very happy to try and pin absolutely all of the problems on Eskom, and say that Eskom must sort out its problems, but this crisis is way beyond the ability of Eskom to solve on its own, and government’s and Ministers’ inaction and refusal to take full responsibility for its foundational role in the crisis is causing it to worsen further each day.

  • Ashley Stone says:

    Funny how the ANC suddenly seems to care a year before the election. Been 15 years boet!
    You guys need to come out of the protective little bubble you live in, counting your cash and finding innovating hiding places, and join us in the real world. Don’t come at night though,its dark! Although I am sure your 12 car motorcade will light things up for us….so detached! You are supposed to be leaders,public servants but your group is neither. You are all expert self servants. People get the government they deserve—please people think before you vote. We need leaders focused on improving your lives and not theirs. VOTE!

  • Jon Quirk says:

    The President is as aware as anyone, that two of the primary causes of the Eskom debacle, are Cadre Deployment and BEE, yet, despite the wise words of Zondo that President Ramaphosa paid lip-service to hearing and understanding, these, the most holy of ANC Shibboleths, are seemingly sacrosanct.

    Mr President, you either are serious about resolving the Eskom fiasco, or you are not – step off the fence and do what you, and everyone else – except Zuma and Julius – know is the correct thing to do – and ditch CP and BEE.

    We are all South Africans and we need right now more than ever, the brightest and the most able running the commanding heights of our economy – for the benefit of ALL South Africans and not just the chosen few cadres.

    • Jane Crankshaw says:

      I support this statement unreservedly! CD and BEE continue to ruin this country….. only idiots, thieves and participating parties refuse to see this.

    • Fritz Jesch says:

      Your statement sums it! Unfortunately, Ramaphosa puts the party first like all his predecessors!
      The ANC is worse than an imbecile Monarch!

  • Willem Boshoff says:

    How will Eskom be taking care of R400bn in debt, 40 000 employees and high running costs if tariffs aren’t increased? Paying customers are jumping off grid / reducing their Eskom reliance as fast as they can and it will continue the next few years. Where will the money come from Mr Ramaphosa? This will end in even more tears.

  • Dave Reynell says:

    None of this would have happened (i.e. “Load Shedding”) had Mantashe given the go ahead for renewable energy sources (Solar and wind) years ago. The United Kingdom is currently exporting power i.e. electricity from its wind farms to France as the latter are battling with maintenance problems at several of their nuclear power stations.

    So much for all this nonsence about renewables being unable to handle even base-load.

    • Roelf Pretorius says:

      It unfortunately is not just Mantashe – in fact the criticism against him of what he has been saying may only have been political rhetoric only. Fact is that the grid needs serious upgrading before it will be able to handle the inputs from renewables in the south of the country. For some reason that has not happened either; that is one part of the neglect that Mantashe is not responsible for, but that definitely should have been part of the planning. No, I think what is necessary is for Ramaphosa’s promise to subsidise rooftop solar panel systems and then the owners of the properties can sell it back to the grid. Once the system to do that is in place, in theory that only needs to take weeks, not even months. What nonsense is this of another TWO YEARS? It is very clear that the ANC, and as a result the President too, does not care anything about SA at all.

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