The 12.74% electricity tariff increase which officially came into effect on Monday is yet another sign of the state waging a war against the poorest of the poor, activists say.
The National Energy Regulator of South Africa (Nersa) approved a 12.74% tariff increase on October 10 last year for Eskom’s direct customers, starting on April 1 and 12.72% for municipalities starting on July 1, for the 2024/25 period.
Farmers and economists have also sounded the alarm on the dire situation facing the sector, saying Eskom’s electricity tariff increases will add to the challenges facing the industry.
“The average increase applied to the key industrial and urban tariffs will be 13.29% due to the increase in the affordability subsidy charge.
“The affordability subsidy charge is raised as a subsidy to the Homelight 20A tariff and is determined by Nersa.
This charge exists due to historically lower Homelight 20A tariff increases and is paid by the non-municipal large industrial and urban tariffs.
“There are no tariff structural changes for 2024/25, however, Eskom is considering a tariff restructuring submission to Nersa for implementation in 2025/26,” Eskom said. In response to the increase, Cry of the Xcluded’s Motsi Khokhoma said: “We are always in the same train, the South African government waging a war against the poorest by implementing austerity measures.
“We are really concerned when electricity hikes are going to be 12.74% when the increment of the R350 grant is R20 – failing to keep up with inflation.
“Their profit-driven motives are evident as they neglect the plight of the poor. Not only are they raising electricity prices, but (this week) petrol prices will rise again.
“Everything they are doing is to fight people who are not fighting, which is the poor. Their indiscriminate budget cuts across various departments only exacerbate the situation.
“Meanwhile, they continue to borrow money but how the money is being used is questionable. You don’t know if it’s going into their pockets, stomachs.
You don’t know because you can't see results,” he said.
He called for a basic income grant of R1 750 to generate “buying power” among the unemployed and for the eradication of corruption and illicit money flows.
Energy analyst Hugo Kruger said the reality was that “the price of electricity is much more expensive than we think”.
“What can people do to try to save on their electricity bill? They can have solar panels, they can try switching off swimming pools, and look into more efficient energy solutions. But we need to come to terms with the fact that Eskom needs more money.
“Nersa has to come with time of usage tariffs or capacity charges; in other words we need fixed tariffs to capacitate because at the moment the richest homes are allowed to escape Eskom tariffs after Nersa increased the price of electricity. They should not be allowed to do that.
“For everything they (use) they just pay about two thirds of their monthly bill, otherwise they've passed the insurance costs on to the lower households, so it's not an easy solution.
“But the reality is either municipal levies will go up, taxes will go up or Eskom’s debt will go up but somebody has to pay for the transmission and distribution infrastructure before we can even get the electricity,” Kruger said.
STOP Coct’s Sandra Dickson said in the poor economic and political climate where salaries were not keeping up with inflation, the tariff hike was destined to further increase hardship among working class households.
She said in Cape Town, the fact that the City’s electricity tariff structure was linked to property values “is a great bone of contention for COCT customers”.
This comes as the City at the weekend confirmed that the property value qualifying criteria for Lifeline electricity is R500 000 or below.
The City said: “For 600 units in the current 23/24, this can mean as much as R400-R800 less per month.
This is based on a R500 000 property value or R7 500 monthly household income, or pensioners earning a maximum of R22 000 regardless of property value.”
On the tariff structure, Dickson said it needed to be revised.
“Everybody should be charged the same tariff except those on the lower Lifeline tariff which is subsidised by the national government.
“The surcharges should be scrapped and the tariff calculations should be transparent and set to be cost reflective. Electricity should be charged as a cost reflection service and should not be a source of surpluses for municipalities.”
Jaco Minnaar, president of AgriSA (Agriculture South Africa), said the electricity tariff increase will have a big impact on all their operations, as it would weigh heavily on their production costs.
“In the medium to long term any increase in production costs will reach the consumer, as farmers and the value chain can only take so much on themselves. Farmers are already under severe pressure because of lower production due to drier conditions, as well as additional expenditure due to deteriorating infrastructure.
“The sad part is that these big increases from Eskom are largely due to their own inefficiencies and historical mismanagement, but the consumer is now paying the price for that,” said Minnaar.
* Additional reporting Thami Magubane
Cape Times