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Outrage at Eskom’s 20.5% price hike plan

Published Dec 11, 2021

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SOUTH Africans and civil society organisations have reacted with outrage at the proposed 20.5% electricity price hike by Eskom for next year.

This comes as a double whammy for consumers after the petrol price was raised by a hefty 81c at the end of last month.

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This week Eskom chief financial officer Calib Cassim confirmed that the power utility had “applied for an electricity price increase of 20.5% for the financial year 2023, which commences on April 1, 2022”.

The National Energy Regulator (Nersa) must adjudicate the electricity tariff application by February 25 and each municipality uses the Nersa determination to calculate electricity tariffs which will be paid by residents from July 1.

Yesterday civil rights group Dear South Africa launched a campaign for citizens to voice their objection or approval, which had already garnered more than 1 200 comments by mid-morning, with many also referring to load shedding.

Mervyn Abrahams, programme co-ordinator of the Pietermaritzburg Economic Justice and Dignity Group (PMBEJD), the monthly food basket cost monitor, said yesterday that the proposed increase “spells absolute disaster for the South African economy”.

“The South African economy can no longer subsidise Eskom, which as a business model is no longer working for this country.

“We call on Nersa to turn down the increase and to ensure that an increase is within inflation (3-6%). We will not see a comparable increase in wages and households will be unable to afford sufficient food.

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“Staple foods, such as maize, meat and potatoes need to be cooked and require electricity, so there will be less budget to buy food, meanwhile, food costs will go up,” said Abrahams.

Civil activist, Des D’Sa from South Durban Community Environment Group (SDCEA) called the proposed increase “a war on the people of this country”.

“This is crazy, why are we paying for money that has been looted and hasn’t been paid back? During Covid many people haven’t worked or are on a reduced salary, there is no money for increases, no-one can afford it,” he said.

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Economist Mike Schussler said the cost of electricity had gone up by 300% in the past decade and that this increase “will take us into the top third of electricity prices in the world ‒ and then it doesn’t work”.

“With these hikes in electricity, one has to ask how do these costs come about? Why is it higher? And why are there on-going increases?

“The increase in the fuel price has also added to the pain of consumers,” said Schussler, adding that there was always a knock-on effect across the economy with fuel and electricity price increases.

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Organisation Undoing Tax Abuse (Outa)’s executive director of the accountability division, Stephanie Fick, said: “Outa expresses surprise at Eskom’s push for a 20.5% hike at a time when South Africans are experiencing hardships and grappling with recovery post-Covid.

“We would suggest that Eskom refocus its attention on recovering funds from the looting period. Nersa, in considering Eskom’s application, needs to focus on assessing what is prudent and any cost increases that are not efficient should not be allowed to burden citizens further.”

This week Nersa released a timeline on processing Eskom’s Fifth Multi-Year Price Determination (MYPD5) revenue application for the 2022/23 financial year, as ruled by the judgment of the Gauteng Division of the High Court in Pretoria on December 3.

Submissions on the proposed increase, which close on January 14, 2022, can be made to [email protected]

Comments on the DearSA website yesterday included:

“A 20+% hike for a service that is often not even available??? Eskom has deteriorated from a world renowned entity to a third world sabotaged joke.” - Hannie

“It is increasing the cost of living on South Africans cause when the prices of food is increasing as well, this will likely cause poverty especially in disadvantaged individuals.” - Siphosethu.

“Maintain the plants better and cut the salaries of the ’bosses’ to accommodate for your increases. Instead of driving your Mercedes, get a MK1 Golf.” - Anrich

“This is from all the pensioners, pensions are not keeping up with increases being implemented. It is also difficult, if not impossible, to supplement income.”- Elizabeth

“This is utterly ridiculous, inflation isn’t even this bad. How is it possible that one entity needs such high rates hikes but the service delivery does not get better? Feels like an endless money pit.” - Nanushka

“We are barely surviving, there is no more money to be obtained from us. Please stop your patronising attitude by saying you understand, you do not, the money needs to come from those who stole and those who stood by while the thievery ran on unabated.” - Desmond.

To comment on the Dear South Africa campaign, go to https://dearsouthafrica.co.za/eskom-tariff-increase/

The Independent on Saturday

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