AfriForum has submitted comments to the Department of Electricity and Energy on the revised electricity pricing policy, which aims to replace the 2008 pricing policy. The new policy outlines the framework for determining and regulating electricity prices, tariffs, and related charges. AfriForum has expressed concerns that the policy does not provide enough clarity on the consequences of non-compliance by the National Energy Regulator of South Africa (Nersa), Eskom, or municipalities.
One of AfriForum's major concerns is that historical costs and contractual obligations from the existing electricity system are still being passed on to consumers. The policy makes provision for these costs to be recovered from consumers, but AfriForum argues that it is not clear enough about where these costs come from and why it is fair to pass them on to current consumers. AfriForum's local government affairs manager, Morné Mostert, said that consumers should not be presented with a "black box" of billions of rand in historical costs without transparency.
AfriForum has also objected to the policy's provisions on municipal surcharges. The organization argues that consumers should be able to see clearly what amount is being charged for electricity and what amount is a municipal surcharge. AfriForum's Deidré Steffens said that a rule on paper means nothing if no one is held accountable when it is not complied with.
AfriForum has further warned that fixed network, capacity, and standby charges should not be used to recover lost revenue when consumers buy less electricity, obtain power from elsewhere, or generate their own power. Mostert said that consumers should only pay for the costs they actually cause and not be penalized for buying less power.
According to AfriForum, it is essential that every rand recovered from an electricity consumer is transparent about what it is for, why it is justified, and how it is calculated. Without this transparency, the organization warns that the reformed electricity market may only bring "new charges for the same old problems".
The revised electricity pricing policy aims to address the changing electricity landscape in South Africa, including the increasing use of renewable energy and the need for a more efficient and sustainable electricity market. However, AfriForum's concerns highlight the need for careful consideration of the policy's impact on consumers and the importance of transparency and accountability.
The Department of Electricity and Energy has not yet responded to AfriForum's comments, but it is clear that the issue of electricity pricing and the recovery of historical costs will continue to be a contentious issue in South Africa. As the country moves towards a more decentralized and renewable energy-based electricity market, the need for a fair and transparent pricing policy will become increasingly important.
Key points
- AfriForum warns that power consumers should not be forced to pay for Eskom's historical costs and lost revenue.
- The organization argues that the revised electricity pricing policy does not provide enough clarity on the consequences of non-compliance.
- AfriForum emphasizes the need for transparency and accountability in the recovery of costs from electricity consumers.
