CAPE TOWN - As the National Energy Regulator of South Africa’s (Nersa) public hearings into the proposed 20.5% electricity price hike by Eskom kicked off in the Western Cape on Monday, the question on everyone’ lips was: ”How can already hard-pressed South Africans afford the increase?
Eskom approached the court seeking semi-urgent relief to force Nersa to consider its revenue application for the 2022/23 financial year, and to set timelines for processing the application in terms of the Fourth Multi-Year Price Determination (MYPD4).
Its application is for a total revenue application of R279bn, R335bn and R365bn for 2023, 2024 and 2025 respectively.
Cape Town mayor, Geordin Hill-Lewis was among 10 objectors who made oral submissions at the virtual hearing for the province on Monday, largely rejecting the increase.
He said: “We reject the proposed tariff increase because we believe it’s unaffordable, unfair and unjust to the South African public.
“The point of departure should be: what is reasonable for South African families to afford?
“I’m surprised how little this comes into the equation, if at all.
“What South African families need is a reduction in the price of electricity; (they need) cheaper power, not significantly more expensive power at a rate nearly four times that of inflation.
“The problem stems from the concept of allowable revenue. It is a strange concept in a competitive market economy,” he said.
He added the City suggested bringing the increase in line with the Consumer Price Index (CPI) of 5.5%.
Also rejecting the increase, activist Lydia Petersen from the Southern African Faith Communities’ Environment Institute (SAFCEI)said people were struggling, some even resorting to crime to survive.
“I see the daily struggles, and envisage what the consequences of an increase would do. This system has stripped us of our dignity.
“An increase would be devastating. I’ve been here many times, I’m fighting for community voices that cannot be heard today,” she said.
In response to Petersen, Nersa member, Zandile Mpungose said in making decision, Nersa had to act within the limitations of its legislative framework.
“It is noted that, as regulators, we also have limitations in which we operate in in legislative and policy framework. In making our determination we have to see what we are permitted to do and take into account all submissions.
(To determine) what will be allowable revenue, we do consider what she is saying,” said Mpungose.
STOP CoCT founder, Sandra Dickson did not make an oral submission, having been a strong advocate against high electricity tariffs in the past.
She said Nersa was not doing enough to stop Eskom.
“The 20.5% increase Eskom is asking for has zero relation to the inflation rate and does not explain how it will be applied. In all previous years' calls for comment, the public clearly voiced its
disgust with these perpetual and exorbitant Eskom tariff increases. Nersa took this into account, only to be overruled by our courts.
“The public already receives under 40 units for R100. This increase will reduce the amount of units to around 30 for every R100 electricity purchased.
“This means that the monthly electricity bill for a small household using around 10 units per day will be close to R1 000,” Dickson said.
Meanwhile, Nersa spokesperson, Charles Hlebela said he was unable to indicate the number of comments received at this stage.
“Nersa will collate all comments received, which will be taken into consideration when the a decision is made,” he said.
The public hearings will continue until January 21, ending in Gauteng.