The public has until Friday to comment on Eskom’s proposed 20.5% electricity price hike.
In December, 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.
With comments to the National Energy Regulator of South Africa (Nersa) closing on Friday, the authority must adjudicate the electricity tariff application by February 25.
In a summary of the utility’s submission to Nersa, Eskom said it was making a total revenue application of R279bn, R335bn and R365bn for the financial years, 2023, 2024 and 2025 respectively.
Eskom said it required reasonable tariff increases to address financial sustainability and liquidity challenges.
A campaign since launched by public participation group Dear South Africa for citizens to comment on the proposal has amassed more than 51 000 comments.
Civil society activist Sandra Dickson said the 20.5% increase Eskom is asking for has zero relation to the inflation rate and did not explain how it would be applied if Eskom is split into three entities as planned.
“The public already receives under 40 units for R100. This increase will reduce the amount of units to around 30 units 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.
“These kind of electricity tariff increases are equally unsustainable as the petrol price increases and will ensure that economic growth in South Africa will be impossible,” Dickson said.
She added that in the past year Eskom won all the court cases it initiated to overturn Nersa decisions.
“Nersa’s responses were in all the cases grossly inadequate to move the judge to consider the hardship forced on to the public by these decisions. This successfully set a precedent and paved the way for Eskom to get the increase it is asking for every time,” Dickson said.
“This said the public is encouraged to give their input to Nersa’s call for comment. Every objection by the public, to yet another humongous electricity tariff increase, will be on record.”
Comments on the DearSA website yesterday included: “Another tariff increase, and especially such a steep increase, will put an unbearable financial strain on most households and constrain the economy.
“Instead of relying on increased tariffs, Eskom needs to show SA that it is capable of revenue collection and debtor management, capital raising for new build aligned with the IRP, effective maintenance of existing plant and equipment. We have lost faith in the utility.”
In Eskom’ submission to Nersa, the utility said it may be tempting to conclude that by limiting electricity tariff increases and requiring that Eskom and/or government borrow the revenue shortfall, it is possible to minimise the negative impacts of rising electricity prices on GDP and employment growth in the short-term.
“However, the results of the economy-wide impact analysis show that the fiscal and economic consequences of awarding Eskom a tariff that is much lower than what it requires, do eventually (and arguably have now) become evident.
“The protection of vulnerable sectors, including poor households and certain industrial sectors are being addressed by Government-led interventions,” Eskom said.
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