Eskom tariff hike meets mass resistance

PUBLIC hearings into Eskom’s application for a 15 per cent tariff hike were held at the Durban ICC late last week during which the power supplier got rapped on the knuckles by national energy regulator, NERSA.

Eskom’s proposed tariff increase of 15 per cent over three years, is based largely on a lack of investment, ongoing repairs and a weak economy, however, NERSA was less than impressed with its argument.

Speaking at the hearings, NERSA chairperson Nomfundo Maseti said Eskom could not keep penalising consumers by charging higher prices even when consumers used less electricity, but were still paying more for the utility.

Responding to the proposed tariff hikes, the CEO of the Durban Chamber of Commerce and Industry, Palesa Phili, said all businesses within their respective sectors were vulnerable to the proposed price increase, however, with the manufacturing sector being one of the most vulnerable.

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“The Durban Chamber’s membership consists of some of the country’s largest manufacturers. A further tariff increase of 15 per cent each year for the next three years will have a negative impact on their operations. The proposed tariff increase will result in an upsurge of costs for these organisations, reduce profit margins and hamper their overall competitiveness which may eventually threaten jobs. The Durban Chamber believes tariff increases should be favourable and justifiable and not punitive to business,” she said.

She said the Chamber recommended the promotion of initiatives to reform the governance of state-owned enterprises (SOEs) like Eskom as these institutions represented critical state infrastructure and could not be left to operate in disarray and fall into mismanagement.

“SOEs need to create added value to business and the nation and not be a drain on the fiscus. The importance of healthy SOEs is pertinent, especially at a time when South Africa is experiencing low growth as they can aid in stimulating the economy and promoting opportunity and job creation,” said Phili.

Desmond D’Sa from South Durban Community Environmental Alliance (SDCEA) said Eskom’s attempt to influence NERSA to approve a tariff increase paid for mainly by the largest customer pool of poor and working-class people, will be met with stiff opposition.

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“We, as the most adversely affected citizenry insist that NERSA, Energy Minister Jeff Radebe and other leaders of our government do not grant Eskom any increase in electricity tariff pricing.Not only do we want poor and working people to get a larger free basic electricity subsidy, we insist on a radical change in how electricity is produced, and we insist that those who were party to the corruption which has undermined this once-impressive parastatal, be prosecuted. Lenders who were party to Eskom’s problems should also be forced to the negotiation table, where they should accept lender liability on the R420 billion debt, so that we innocent consumers are not compelled to keep paying for Eskom management’s mistakes,” he said.

He said Eskom had consistently turned to ordinary customers to extract more money, resulting in millions of unemployed people, pensioners and child-grant recipients being disconnected from the grid due to unaffordability.

“Municipalities themselves have added their own increases and they have been ruthless in carrying out disconnections, especially in eThekwini. Results include wars with residents over illegal connections, and in many residents living in darkness for years. Yet the major users who profit from subsidised energy shift their profits overseas to the major cities of London, New York and Melbourne,” he said.

He said the country was in crisis with climate change, and what Eskom should have done long ago was to change from the ‘harmful and destructive development path’ to a much more cleaner, renewable energy.

“We still need a higher amount of free basic electricity so that energy is affordable to poor and working people. All of these suggestions, demands and criticisms have been suggested to Nersa, Eskom, government and the banks by SDCEA since even before our campaign against the World Bank loan in 2010. Naturally, we consider NERSA to be deaf to our concerns, so now it is time to increase the heat on public participation, before we again take to the streets in protest,” he said.

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