Eskom’s proposed tariff hike ‘unfair to the poor’

SOUTH African consumers who are already reeling from high food prices, fuel and electricity levies have criticised Eskom’s proposed electricity tariff hike of 20.5%, saying it would be a huge burden on their already overstretched household budgets.

The power utility confirmed that it had applied for an electricity price increase of 20.5% for its 2022/2023 financial year. It said the increase would be effective from April 1.

In its presentation to the National Energy Regulator of SA (Nersa) on Monday, Eskom said the increase was driven by purchases from independent power producers (IPPs) and carbon taxes, costs that were beyond Eskom’s direct control. The power utility said these two costs accounted for 13.8% of the requested increase.

In March, Nersa approved an increase of 15% for Eskom’s direct customers, which was implemented in April. A hike of 17.80% for municipalities was implemented on July 1, 2021.

However, consumers feel that these price increases amount to daylight robbery.

In December, Nersa published a consultation paper and Eskom’s application, and invited the public and other stakeholders to attend virtual public hearings on the matter, which began on Monday. This saw Cape Town mayor Geordin HillLewis call on Nersa not to underestimate the harsh economic realities of South Africans.

He appealed to the regulator to reject Eskom’s application, saying the increase would be unfair.

Mitchells Plain resident Lydia Petersen told the hearing that the electricity hike should not be allowed.

Bonny Ramatla, a resident of Cosmo City in Johannesburg, said it was a bad decision for Eskom to increase prices, taking into consideration the economic hardships in the country.

“Salaries are not going up but Eskom is turning a blind eye to that. This also means most families would struggle even more because they can hardly afford electricity,” said the 38-year-old.

Johannesburg resident Samuel Mahlatsi, 35, echoed his sentiments, saying that senior staff at the utility should take salary cuts if the power utility was experiencing financial difficulties.

“I don’t support this at all. Already I am paying too much for electricity, more than R600 a month, and I have not received a salary adjustment since 2020,” said Mahlatsi.

Zettmore Makuane from Soweto said although he had accepted that prices would rise every year, the question was, what had Eskom done to eliminate illegal connections?

“They can implement increases but if they’re failing to deal with illegal connections, then we are not going anywhere. We also know that there are too many scandals and missing funds, but nothing has been done,” he said.

The 35-year-old added that it was necessary for the power utility to increase its prices as everything had gone up. “But saying so, electricity should be stable. We can’t have electricity for certain days or hours. Are they able to reassure us that we are not going to have unnecessary load shedding? We pay for the services and we should get them without any interruption.”

Joseph Mofokeng, from Palm Springs, said the 20.5% increase would be too much. “I remember there was a time when I used to have enough electricity with R30. What has happened to our country now? Everything is expensive. I think we must fight because we will struggle to survive,” he said.

The situation will be dire for unemployed Katleho Selimandlela, a resident of Evaton West, Sebokeng.

“Already electricity is expensive. Imagine what is going to happen to some of us who are unemployed. I am paying R300 a month and it is too much. Are these people (Eskom) saying I will have to fork out more than that now? Where am I going to get that money?” Selimandlela said.

Cosatu spokesperson Sizwe Pamla said the union opposed the increase. “Millions of workers have lost wages over the past two years. More than 2.2 million have lost their jobs during this period. Those lucky to have jobs are having to support increasing numbers of unemployed relatives and are highly indebted as a result. Eskom itself has only given its employees a 1.5% increase. Workers simply cannot afford this level of pickpocketing of their meagre wages.

“Eskom needs to deal with the fundamental causes of its financial predicament, namely the billions lost to corruption, wasteful expenditure and an unreliable supply of energy to consumers. It needs to invest in a more efficient bill to consumers, for its own mismanagement is not a solution.

“Consumers are tired of neverending exorbitant Eskom tariff hikes. Since 2006 tariffs have increased by 500%,” said Pamla.

On Thursday, the DA announced that it had launched a petition calling on South Africans to oppose Eskom’s application for a price hike.

The party’s leader, John Steenhuisen, said the proposal was completely out of touch with the reality of many South Africans, which was why the DA was taking on the battle to get Eskom to withdraw its exorbitant request for a hike.

The party said the petition needed to reach 40 000 signatures and by Thursday night it had been signed by 19879 people.

Eskom spokesperson Sikonathi Mantshantsha said the application was based on methodology developed by Nersa.

“Eskom is required to make an application in accordance with the required methodologies. Eskom has requested a negative return on assets in a bid to assist in minimising the impact on consumers. This is an amount of R15 billion for the financial year 2023,” he said.

“It is recommended that Nersa consider further interventions that will protect the poor residential customer, ensuring free basic electricity. Any further interventions may require government consideration,” Mantshantsha said.