DA urges ‘anti-competitive’ Eskom to withdraw legal proceedings against Nersa

The Democratic Alliance (DA) on Thursday urged State power utility Eskom to withdraw its “futile and costly” legal dispute and support the transformation of South Africa’s energy sector.

Eskom has approached the High Court to review the National Energy Regulator of South Africa’s (Nersa’s) decision to grant four trading licences in what it describes as its area of supply.

Eskom’s decision to oppose the licences shocked the market at the time, as the utility had failed to object to the issuance, starting in 2014, of previous trading licences to PowerX, EnPower Trading, Neura Trading, Energy Exchange of Southern Africa and Envusa Trading. In addition, Eskom Holdings’ own National Transmission Company South Africa also successfully applied for a trading licence from the regulator as part of its legal separation process.

Eskom reiterated its objection to allowing more than one licensee to provide electricity in the same area and argued that the approval had been made in the absence of fully developed trading rules.

DA spokesperson on electricity and energy Kevin Mileham said Eskom’s litigation not only distracted from its primary responsibility to deliver reliable energy to South Africans but was also contrary to the Electricity Regulation Act, which explicitly encouraged competition through trading and wheeling provisions.

“Any protracted legal battle between Eskom and Nersa will ultimately come at the taxpayers' expense, further compounding the financial strain on South Africans without any real benefit. Instead of wasting time and resources on legal challenges, Eskom should focus on collaborating with the private sector to develop a competitive, secure, and cost-effective electricity market,” said Mileham.

He said Eskom was attempting to stifle competition by opposing Nersa's licensing decisions, which he said undermined efforts to diversify South Africa’s energy sector.

“At a time when the nation urgently needs a stable and diversified energy supply, Eskom’s legal challenge only reinforces a monopolistic grip on the market, limiting consumer choice and maintaining high costs for both households and businesses,” he added.

Mileham stated that allowing private-sector players into the energy market would not only alleviate the pressure on Eskom but also drive down electricity costs for South Africans.

The party firmly believes that Eskom’s anti-competitive behaviour will harm consumers who will bear the brunt of higher prices and unreliable supply.