Eskom is now heading to the courts to increase tariffs as they say the current tariff hike will not be enough. The National Energy Regulator of South Africa made a decision where tariffs increases of 9.41%, 8.1% and 5.22% over the next 3 years.
Eskom will now be taking NERSA to court to ask for a higher increase and spend a further R2.7 million in legal cost. This adds to the current Eskom debt of more than R440 billion.
Eskom’s CFO said the following:
“Following analysis of the reasons for decision, the Eskom Board decided on taking the matter to court.
“Consequently, we have put in an application for urgent interim relief, which is necessary to avoid financial disaster for Eskom. We are seeking an order to address this shortfall in a phased manner.
“In addition, we are seeking the court to review and set aside NERSA’s MYPD4 revenue decision and remit that decision to NERSA for reconsideration in the light of the Court’s judgment”.
There are many cities that owe Eskom money with the biggest one being Soweto owing more than R17 billion in electricity bills. Eskom is still working on getting prepayment boxes installed.
Even after finance minister Tito Mboweni announced an R59bn bailout over 2 years and a further tariff increase that will result in R69bn over three years Eskom still needs more funding. Eskom has also asked that their debt will be taken over by the government
Moody’s Investments have warned the South African government that more bailouts could harm South Africa’s credit rating.