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Our favourite SOE is not going to lie down and die under mounting pressure from consumers, recent court action indicates the battle for higher pricing is ongoing.

Through the courts, and a Nersa application, Eskom wants to claw back massive additional revenue from electricity customers via tariffs.

Eskom insists that its electricity prices are far from being cost reflective, and that they need to rise by some 30% in order to become so. Thereafter, Eskom says electricity prices in South Africa would stabilise, with only inflationary increases in subsequent years.

In Summary

Through three court actions, Eskom is challenging Nersa determinations dating as far back as 2014, that resulted in revenue shortfalls totalling R102 billion + R35 billion + R29 billion = R166 billion, and the associated electricity price increases that were well below that which Eskom wanted.

In addition, in an RCA application to Nersa for the 2018/19 financial year, Eskom is currently seeking to claw back an additional R27.3 billion from electricity customers though electricity price increases over and above Eskom’s normal annual price increases.

With Eskom’s electricity sales revenue for the 2018/19 financial year at R180 billion, it is clear that the revenue shortfalls of R166 billion challenged in court actions by Eskom, plus the current RCA application to claw back R27.3 billion from electricity customers via the tariffs, would result in additional price increases very significantly higher than those currently awarded by Nersa for the next few years.

While Eskom is unlikely to be able to recover the full alleged revenue shortfalls in its applications, nor will it be allowed to recover these in a single year, the above figures do indicate the scale of what Eskom is trying to achieve through its various court actions and its latest RCA application.

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