South African farmers oppose Eskom's high court review application

A Free State farmers' organization has backed Nersa, Mzansi's energy regulator, in its opposition of Eskom's high court application to review its Regulatory Clearing Account (RCA).  As it stands, Eskom wants the court to review and set aside Nersa's approval of a R13-billion RCA balance, and the regulator's decision to grant Eskom's supplementary revenue balance of R1.2 billion. Both are in respect of the 2018/19 financial year. quoted Free State Agriculture (FSA) president Francois Wilken as saying: "The court decision in Eskom's favor to increase prices way above inflation will definitely affect the agricultural sector negatively with repercussions through increased food prices and job losses.”

Wilken confirmed that FSA presented their arguments to Nersa at all of the public hearings held in the Free State about Eskom's application for tariff increases.  At the hearings, the FSA emphasized the following points:

• The fixed cost component of accounts are unaffordable for farmers, particularly small-scale and family farmers which make up the majority of FSA's membership. The organization believes they should be exempted from the increases.

• The consumer does not have to bear the brunt for Eskom's bad planning decisions. This, said Wilken, while "expecting higher energy sales while increasing load-shedding and forcing consumers to install own energy solutions, back-up power and energy savings technology. All this forcing Eskom into a downward utility spiral."

• As price-takers, the agricultural sector not only face Eskom price increases that are higher than inflation, but also in labor costs through the national minimum wage, and increasing fuel costs through fuel taxes. "All [of] this making certain production energy [and labor] intensive enterprises unviable leading to job cuts from the sector and food price inflation in the longer run," argues Wilken.

• Also, FSA believes that blatant corruption that took place under Eskom's watch should not be reclaimed and paid for by the consumer.


[ R10 = € 0,58 ]

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