Hike Eskom electricity tariffs at your own peril. This is the warning of the SA Local Government Association (Salga) and SA National Civic Organisation (Sanco) on the power utility’s request for a three-year 15% year-on-year tariff hike.
Eskom turned to the National Energy Regulator of SA (Nersa) in a bid to inject cash into its coffers which are over R400 billion in the red.
The debt is widely attributed to mismanagement and failing power-generation plants.
Eskom chief financial officer Calib Cassim told Nersa the company made every effort to control its operating expenditure, but it needed, in addition to the savings, more revenue through price increases.
“Eskom’s financial situation is unsustainable. This is illustrated by the target loss of the 2019 financial year resulting in over R15bn,” he said.
Salga and Sanco warned that if Nersa granted the tariff hike request, there would be unrest and increased incidents of electricity theft among overburdened poor communities.
“It is becoming harder and harder for municipalities to explain the ever-increasing prices to their constituency. These increases are incentivising the affluent customers to look for other means of energy and go off the grids of municipalities.
“This will leave municipalities with poor customers who have no other options but to default on their payments and even engage in theft of electricity,” said Salga executive manager Jean de la Harpe.
She added that the government needed to consider changes in the electricity industry.
“The structure is no longer sustainable and needs to be revisited for Eskom and for municipalities. Bring in more independent players who will by default force efficiencies out of the industry.”
De la Harpe said the R20bn debt owed to Eskom by municipalities was a drop in the ocean.
“This is over a number of years. It is acknowledged that municipalities owe Eskom, and it is a problem, but it is not the main cause of Eskom’s debt issues.”
Sanco spokesperson Jabu Mahlangu echoed Salga’s sentiments that the poor would be hit the hardest.
“Taking into account the current economic situation and level of unemployment, it’s hitting the poor very hard.
“Even for businesses, it would result in the increasing of prices because they have to recoup those running costs from the consumer.
“So the consumer gets hit many times,” said Mahlangu, accusing Eskom of punishing the public for its own blunders.
“We are confronted with this increase owing to the mismanagement of Eskom and the money lost to the corrupt deals that happened between some of our leaders and the Guptas.”
Nersa spokesperson Charles Hlebela said a decision on the tariff increase would be taken on March 1.
“Eskom’s application is being taken through the regulatory process and we cannot speculate about the regulator’s decision,” said Hlebela.