Latest news with #Nersa
Daily Maverick
19 hours ago
- Business
- Daily Maverick
Eskom's court challenge to electricity trading licences is a dangerous reactionary strike against reform
Eskom's court application opposing the National Energy Regulator of South Africa's decision to issue five new electricity trading licences is not only regressive – it is dangerously disingenuous. In a filing to the Gauteng Division of the High Court on 24 July 2025, Eskom alleges that the National Energy Regulator of South Africa's (Nersa) decision represents a radical and unconsulted 'new policy' threatening to 'upend the entire landscape of electricity provision' in South Africa. This accusation reeks of institutional amnesia, denialism and resistance to long-standing reform commitments that Eskom itself has acknowledged for decades. Let us be clear: the liberalisation of South Africa's electricity sector is not new. The notion of third-party electricity trading, open access to the grid and competitive supply was explicitly articulated as early as 1998 in the White Paper on the Energy Policy of the Republic of South Africa. The emergence of electricity traders is not a deviation – it is the fulfilment of a long-standing policy commitment. Eskom knows this. That seminal document – endorsed by the government and cited countless times by Eskom itself – called for the unbundling of Eskom and the creation of a competitive electricity supply industry to improve efficiency and ensure energy security. In the white paper the government unequivocally stated: 'The electricity sector will be gradually opened to greater competition, and the current single-buyer model will be reformed.' This included plans for retail competition and multiple electricity suppliers. Fast-forward to 2019, and the Department of Public Enterprises' Roadmap for Eskom in a Reformed Electricity Supply Industry reaffirmed this vision. It clearly mapped out the unbundling of Eskom into three independent businesses – generation, transmission and distribution – and explicitly supported the facilitation of competition in generation and supply. The Eskom roadmap stated: 'To enable fair and non-discriminatory access to the grid, electricity traders will be allowed access to customers, and mechanisms will be put in place to ensure equitable pricing.' In other words, the emergence of electricity traders is not a deviation – it is the fulfilment of a long-standing policy commitment. Eskom knows this. And yet, in a desperate attempt to cling to its monopoly, Eskom's court papers now argue that these licences represent 'a unilateral policy shift' that 'has not been the subject of public consultation'. That claim is not only false – it is egregiously dishonest. The five trading licences that Eskom now seeks to nullify were granted by Nersa after following due process, including public participation by Eskom itself, as mandated under both the Electricity Regulation Act of 2006 and the Electricity Regulation Amendment Act that came into effect on 1 January 2025. Eskom also had the opportunity to comment on the Acts themselves during the industry consultation process and parliamentary promulgation processes, and no doubt did so. By waiting until after the licences were granted to launch a legal challenge, reeks of strategic delay and corporate obstructionism. Retail competition is not 'poaching' – it is how liberalised and competitive energy markets function. Worse still is Eskom's inflammatory language. The utility claims that traders are now allowed to 'poach the best of Eskom's customers' without bearing any of the 'redistributive responsibilities' enabled by Eskom's current tariff structures. This argument is deliberately misleading. Eskom Distribution holds two distinct licences: a distribution licence, which grants it exclusive rights over the wires business in its service areas, and a trading licence, which is non-exclusive and places Eskom in direct competition with other energy retailers. The tariffs charged for network access are regulated and paid by the customer, regardless of who supplies the electricity. In other words, Eskom continues to recover its costs for maintaining infrastructure even when it loses customers to another licensed electrical energy trader. This is a thinly veiled attempt to weaponise social justice rhetoric in defence of institutional self-interest. To conflate distribution revenues with energy trading revenues – as Eskom does – is a sleight of hand aimed at preserving an outdated monopoly. Retail competition is not 'poaching' – it is how liberalised and competitive energy markets function. Eskom is free to compete for customers based on service quality, price and energy attributes such as green credentials. If Eskom cannot compete on those terms, that is a reflection on its product offering – not on the rules of the game. Even more farcical is Eskom's suggestion that allowing competition will cause prejudice to 'users of electricity generally, the many poor people reliant on subsidisation… and to the taxpayer.' This is a thinly veiled attempt to weaponise social justice rhetoric in defence of institutional self-interest. Eskom's bloated operating model, high losses and culture of inefficiency are the primary threats to affordability – not the emergence of competitors who can deliver electricity more efficiently or more sustainably. Let us also not forget: the Electricity Regulation Amendment Act, which came into force on 1 January 2025, was the result of years of public engagement and parliamentary debate. It entrenches the legal foundation for competitive electricity markets and affirms the legal standing of electricity traders. Eskom did not oppose this Act or its predecessor. It cannot now claim surprise. Furthermore, PowerX – South Africa's first licensed trader – was granted its licence as early as 2009, 16 years before this court application. The licensing of several other traders has followed. Eskom never challenged these licences. To now cry foul – after traders have operated for more than a decade and with policy clearly evolving towards competition – is both disingenuous and opportunistic. Instead of adapting to the market evolution it helped script, Eskom is now deploying legal tactics to delay the inevitable. Eskom's challenge also betrays a deep contradiction at the heart of its rhetoric. On one hand, it laments the risk to its revenue and its ability to cross-subsidise poor households. On the other, it has consistently failed to deliver on its service obligations to those very households – many of whom face load reduction, unaffordable tariffs or outright disconnection. What Eskom fears is not harm to the poor – it is the erosion of its customer base by more agile, customer-centric alternatives. The true risk to Eskom's business model is not Nersa's licensing of traders. It is Eskom's failure to reform itself in line with the policy it helped shape. This case reveals Eskom for what it is: a state-owned behemoth engaged in regulatory brinkmanship to preserve its dominance, even as the sector moves on. Instead of adapting to the market evolution it helped script, Eskom is now deploying legal tactics to delay the inevitable: a competitive, diversified electricity supply industry where customers have choice and innovation can flourish. If the court entertains Eskom's arguments, the result will be profound uncertainty for all prospective market entrants. It will deter investment, undermine regulatory credibility and signal that vested interests can override both law and policy. But if Eskom's challenge is dismissed – as it should be – it will reinforce the integrity of South Africa's electricity reform process and signal that the country is serious about enabling a modern, competitive energy sector. In conclusion, Eskom's court challenge is not merely a legal objection – it is a full-frontal assault on reform. It misrepresents the law, distorts policy history and manipulates socioeconomic concerns to shield its own inefficiencies. The courts – and the public – must see this for what it is: a desperate attempt to turn back the clock on two decades of progress. DM
The Citizen
a day ago
- Business
- The Citizen
Eskom proceeds with court challenge to five trading licences
Fears 'cherry-picking' of its best customers. Eskom has made good on its earlier threat to challenge in court energy regulator Nersa's granting of licences for electricity trading. It wants trading rules to be finalised first and even suggests that traders contribute to the payment of municipalities' R100 billion arrear debt for bulk purchases. Following Nersa's publication of the reasons for its decisions, Eskom has launched an application in the Gauteng Division of the High Court to have the granting of five trading and one import/export licence reviewed and set aside. The respondents are Nersa and the five licensees: Green Electron Market, CBI Electric Apollo, GreenCo Power Services, Discovery Green and Noa Group Trading. This comes more than decade after the first electricity trading licence was granted to PowerX. Nersa has so far granted around ten such licences. According to the agenda, the regulator will consider two more trading licences and two import/export licences at its 30 July meeting, as well as an application by a municipality for separate distribution and trading licences. If granted, Eskom may join the new licensees to the action. Traders, also referred to as aggregators, are essentially middle-men between independent power producers and end-users. They enter into agreements with multiple generators and sell to multiple customers with diverse energy requirements, at a margin to compensate them for taking some of the risk. This enables especially smaller businesses to access renewable energy despite being unable to take the full production of a specific independent power producer or enter into a 20-year off-take agreement. ALSO READ: Electricity trading? Not so fast, says Eskom Eskom's argument In an affidavit in support of the application, Eskom senior manager for legal matters Mohlago Masekela says the licensing decisions 'form the beginning of a fundamental change of policy by Nersa that has not been the subject of public consultation and the implications of which appear not to have been explored by Nersa.' According to Masekela it will 'upend the entire landscape of electricity provision in this country, without taking meaningful steps to understand the consequences before doing so. 'Under the guise of promoting competition and labouring under material misapprehensions about the law and the facts, Nersa has allowed a free-for-all in which traders are allowed to poach the best of Eskom's customers without carrying any of the redistributive obligations that the tariffs paid by those customers to Eskom enable Eskom to discharge.' Eskom contends that its distribution licences and those of municipalities, grant them the exclusive right to distribute and trade in electricity in the licensed distribution areas. It relies on Nersa's distribution rules that prohibit two or more distributors to operate in the same area. According to the utility, no rules have ever been made to deal with electricity trading as a separate licensed activity. Although Nersa has acknowledged the need for such rules and has embarked on a process to finalise it, it proceeded to approve trading licences in the meantime. This, Eskom states, is irrational. Eskom submits it is not possible to lawfully issue individual trading licences on an ad hoc basis, without considering the impact on the businesses of Eskom and municipalities of traders cherry-picking its best clients and setting conditions to balance the rights of such traders with those of Eskom and the municipalities. ALSO READ: Nersa approves cross-border electricity trading Eskom argued that instead of promoting competition, the granting of the trading licences will lead to unfair competition, because traders will have the flexibility to offer large power users, that are consistent payers, discount tariffs, while Eskom is bound to regulated prices. The utility states that 'simply opening up a free-for-all for traders in areas of supply previously provided by either Eskom or a municipality, has the potential of causing profound risk to the viability of the system'. 'Eskom continues to hold the various obligations arising from the obligations in its distribution licences, but can now have its most reliable and lucrative customers taken from it by traders given permission to trade in the same area of supply.' It continues: 'Ultimately, since it is funded by both the taxpayer (in the form of government assistance given in the recent past) and the electricity consumer, it is taxpayers and smaller electricity consumers who are not attractive to traders, who will pay the price for this.' Some of the issues Eskom believes should be addressed in the trading rules include which customers will be allowed to chose who they buy electricity from, thereby demarcating the trading market. If customers are for example allowed to buy from a trader, but top-up continuously or on an ad hoc basis from Eskom's supply, the rules could provide for Eskom to set differentiated tariffs in such cases 'that reflect the true cost of providing these specific services.' ALSO READ: Presidency 'very concerned' about licence for Eskom transmission unit Eskom further suggests that the matter of the R100 billion-odd arrear municipal debt must be dealt with in the trading rules by restricting traders from operating in defaulting areas or establishing a financial clearing house that prioritises the payment of Eskom arrears before disbursing revenue to traders. It suggests that the cross-subsidisation regime should be preserved, with traders being required to contribute to a subsidy pool or municipal support levy. It is not yet clear whether Nersa and the five traders will oppose Eskom's application. This article was republished from Moneyweb. Read the original here.
IOL News
22-07-2025
- Business
- IOL News
EFF backs Tembisa residents in protest against electricity surcharge
The Economic Freedom Fighters (EFF) in Gauteng has expressed their solidarity with the people of Tembisa who embarked on an electricity surcharge protest on Monday morning. The EFF has described this service charge as unreasonable, as it places an additional strain on the everyday residents of Ekurhuleni, who are already facing significant challenges due to widespread poverty and concerning unemployment figures in the region. The Metro had implemented a R126 electricity fixed surcharge, which the Executive Mayor of the City of Ekurhuleni, Nkosindiphile Xhakaza, subsequently temporarily suspended after the protest during an address with the community. However, the red berets said this was not enough, they want the permanent removal of this expense, which they term as exploitative. The EFF further said Xhakaza's utterances are ineffective as he does not have the powers to make such pronouncements without consulting the legislature. This charge followed the 12.74% national electricity tariff increase approved by the National Energy Regulator of South Africa (Nersa), which came into effect on April 1, 2025 This contentious surcharge follows an alarming 12.74% increase in national electricity tariffs approved by the National Energy Regulator of South Africa (Nersa), which took effect on April 1, 2025. The increase is part of Nersa's multi-year revenue determination plan, which includes further hikes of 5.36% in the 2026–2027 financial year and 6.19% in 2027–2028. Nersa justified this increase as part of a multi-year revenue determination strategy aimed at stabilising the country's failing energy supply while attempting to remedy Eskom's challenging financial predicament, marred by aging infrastructure and ongoing load-shedding incidents. Nersa said it aims to stabilise the country's energy supply and support Eskom's deteriorating financial position, which has been hampered by aging infrastructure, delayed maintenance, and continued load-shedding.
The Citizen
22-07-2025
- Business
- The Citizen
Shimza's ‘Hang Awt' in Thembisa puts the vibes on hold due to protests as he rocks Europe
Shimza, who is from Thembisa, is currently on a two-month tour of Europe and North Africa. DJ Shimza's eatery The Hang Awt 1632 temporarily closed its doors following protests in Thembisa. Picture: DJ Shimza's eatery, The Hang Awt 1632 in Thembisa, closed its doors on Monday in respect of the community protests that had gripped the Ekurhuleni township. 'Based on the recent events happening in and around Thembisa, we have decided to put the vibes on hold for now,' read the brief statement. 'We sincerely apologise for any inconvenience caused by this closure and will continue to assess the situation. We are committed to reopening as soon as it is safe to do so. Updates will be communicated via our official social media platforms.' Thembisa community members took to the streets on Sunday night and Monday to protest against the electricity tariff implemented by the City of Ekurhuleni, as new electricity charges came into effect on 1 July for the 2025-26 financial year. Residents expressed concern over fixed monthly fees of just under R109 for single-phase connections and more than R200 for three-phase connections. The new charges follow a 12.74% national electricity tariff increase approved by the National Energy Regulator of South Africa (Nersa), effective from April 1, 2025. The Hang Awt 1632 is expected to open for business after the suspension of the protests. ALSO READ: Ekurhuleni mayor to suspend electricity tariff hike after protests in Thembisa Thembisa community wins However, following the heated protests, City of Ekurhuleni mayor Nkosindiphile Xhakaza suspended the new fixed electricity tariff charge until further notice. Addressing residents outside Rabasotho Community Hall, Xhakaza expressed relief that the protests had not resulted in any reported injuries. 'It has been painful since this morning and last night when you decided to take to the streets. We must agree that some people have no interest in coming up with solutions,' he said. ALSO READ: DJ Shimza's restaurant The Hang Awt set to reopen its doors Shimza in Europe Real name Ashley Raphala, Shimza is currently on a two-month-long European and North African tour that has already seen him play DJ sets. The tour started in early July, where he performed in Egypt , followed by sets in Spain, Morocco and France. When the protests kicked off on Sunday night in his beloved Thembisa, Shimza was performing at Ibiza's Playa Soleil. He'll be performing in Greece and Italy in the coming days. His tour is expected to wrap up in early September. NOW READ: 'You aspire to tenders' – Mmusi Maimane drags DJ Shimza and Athi Geleba
TimesLIVE
21-07-2025
- Politics
- TimesLIVE
Ekurhuleni mayor suspends controversial electricity surcharge after violent Thembisa protests
Ekurhuleni mayor Nkosindiphile Xhakaza has suspended the controversial electricity surcharge that led to violent protests in Thembisa on Monday. Thembisa residents took to the streets to air their frustration and demonstrate their rejection of the introduction of a fixed R126 electricity surcharge, which kicked in on July 1. Major routes in Thembisa were blockaded by protesting community members. Xhakaza said he understood the community's frustration. 'We understand where your frustrations are coming from and we would like to thank you for keeping the protest peaceful,' he said. He added that the tariffs had gone through the integrated development plan (IDP) process. 'These tariffs are from Eskom's pricing structure and they were approved by the National Energy Regulator of South Africa (Nersa).' Xhakaza announced that the electricity surcharge had been suspended with immediate effect while they attempt to come up with a better solution. Police had their hands full and fired rubber bullets to disperse the angry crowd which had blockaded streets with rocks, burning tyres and broken glass. Thembisa ward councillors hosted a community meeting on Monday at Rabasotho community centre that ended abruptly after residents demanded the presence of senior City of Ekurhuleni officials to provide answers on tariff increases implemented from July 1.
