244 29.06.2015 Two ladies carry braziers on their heads at the end of their day in Westgate taxi ranks where they sell mealie mea to taxi drivers and commuters. Picture: Motshwari Mofokeng
244 29.06.2015 Two ladies carry braziers on their heads at the end of their day in Westgate taxi ranks where they sell mealie mea to taxi drivers and commuters. Picture: Motshwari Mofokeng

Take a hike, Eskom!

By Anna Cox, Lerato Mbangeni And Staff Reporter Time of article published Jun 30, 2015

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Johannesburg - South Africans dodged the Eskom bullet this time, but don’t expect to be so lucky next year. And while consumers may have sighed with relief when the National Energy Regulator of South Africa (Nersa) rejected Eskom’s last-minute application for an increase in electricity tariffs, it’s still going to be a hard winter for those struggling financially.

On Wednesday, petrol goes up between 41c and 44c a litre. Wednesday also marks the start of the municipal financial year, so all those annual hikes in rates, electricity, water and other tariffs will come into force.

More pain for residents is that on Thursday, the government’s enforcement of the new e-toll dispensation on Gauteng’s freeways kicks in.

On Monday, Nersa turned down Eskom’s last-minute plea for a 25-percent price increase because the power utility’s application was missing key information and didn’t comply with the rules.

“Based on the available information and the analysis performed, the energy regulator decided not to approve Eskom’s application,” said Nersa chairman Jacob Modise.

Nersa told Eskom to submit an application for an adjustment that complied with the pricing rules, or to submit a completely new application for a new multi-year pricing period from April next year to March 2019.

Eskom’s existing pricing agreement covers the period from April last year to March 2018, and is called the Third Multi-Year Price Determination (MYPD3).

Nersa would prefer a new application – an MYPD4 – rather than a change to MYPD3, which would mean hikes next year.

Nersa’s regulator member for electricity, Thembani Bukula, expects Eskom to bring another application.

It’s now too late to change this year’s tariffs – the law requires consultation, and municipalities may not change their tariffs after the start of their financial year tomorrow, so a new application for next year seems likely.

“I think that in the options we have given them, the one that is smart and the one that is good for this country would be an MYPD4,” said Bukula.

Nersa wanted clear signed dates for delivery of the new power stations and specified final costs, which Eskom did not supply.

“We don’t want those guessed dates, we want signed commitments by all the parties that are involved,” said Bukula.

“We want to get to a stage where we say that it’s going to cost R200-billion, or R500bn, when we build Medupi, and that’s it.”

Eskom filed its application for a total increase of 25.3 percent for 2015/16 on April 30, just weeks after the utility suspended its chief executive, the financial director and two other executives.

Eskom wanted nearly R53bn more out of customers to cover the costs of running expensive diesel generators and buying from private contractors to keep the lights on when the baseload power stations break down.

This is needed because the new power stations being built are years behind schedule. By 5pm, the utility was load-shedding again. Areas in darkness included Sunninghill, where Eskom’s head office is situated.

The existing Nersa approvals allow for a 12.69 percent increase from April this year for Eskom’s direct customers – already implemented – and a maximum increase from tomorrow of 12.2 percent for municipal customers.

City of Joburg customers should expect increases from Wednesday of 12.19 percent for electricity, 14 percent for water, 6 percent for rates and 8 percent for refuse removal.

There’s some relief for those with prepaid meters, who may apply to be on time-of-use tariffs and thus save by moving their electricity use to off-peak times.

Winter is always a tough time on pockets, as power utilities charge higher winter rates and consumers use more power to stay warm.

The new water tariffs hit the big users hardest. The first 6 kilolitres is free for all Joburg households, the next 4kl cost R6.80/kl but those using more than 40kl pay R28.08/kl.

“There’s a lot of pressure and it’s going to make life difficult,” said Bafentse Ntlokoa, a 30-year-old mother who rents an apartment in the Joburg CBD.

Ntlokoa found out about the increases via her latest invoice.

“It’s going to be especially hard because my daughter is starting creche soon and that’s another budget readjustment that doesn’t come with a salary adjustment.

“I felt anxiety about what kind of adjustments I’ll have to make because I’m looking at an extra R200 to R300 extra every month and it’s a big knock.”

Irma Michaels, from Eldorado Park, has tried to insulate herself from the rising costs, but she always feel the blows, no matter how much she tries.

“We get a lot of load shedding here in Eldorado Park, so we have a generator as well as a gas stove and gas heater, but that’s going up too... It will be less electricity for the same amount now, and that’s a big problem,” she said.

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