Cape Town - How will we cope?
That is how founder of the group Electricity Tariffs Must Falls Natasha Selbourne reacted to the National Energy Regulator’s (Nersa) decision to allow Eskom to increase tariffs by 18.6% for the 2023/2024 year, which will come into effect from April.
“Nersa has approved a total revenue of R300bn for the 2023/24 financial year, which translates to a tariff of 173.80c/kWh. The percentage increase is 18.65% based on Nersa’s approved tariff of 146.48c/kWh in the 2022/23 financial year,” the regulator said.
For 2024/25, the Nersa-approved revenue is R334bn, which translates to a tariff of 195.95c/kWh, resulting in a 12.74% increase.
“Eskom's application for the 2023/24 financial year’s revenue is R351bn, including Regulatory Clearing Accounts (RCAs) and court orders. Nersa's approved allowable revenue is R318bn after considering adjustments for inefficiencies and prudency reviews. For the 2024/25 financial year, Eskom applied for revenue of R381bn, including RCAs and government injection, as per the court order.
The Nersa-approved revenue is R352bn after considering adjustments for inefficiencies and factoring the RCA as per the Energy Regulator decision of 14 December 2022,” the regulator added.
The announcement was met with an outcry, with some opposition parties calling for South Africans to reject it, as the increase was coupled with already high costs of living.
Adding more pain was that the decision means South Africans would be paying more for an unreliable service as Eskom is expected to increase load shedding stages.
“There shouldn't be any kind of increase happening at all; we are already drowning in debt to survive.
They are not even providing a proper service with continuous load shedding. Gas is not even a viable alternative anymore because it’s just as expensive. The working class are the most affected. It’s fuel and gas increases, bond increases electricity, people are paying R1 000 more on their bonds, how are people supposed to survive? There is no relief.
We won't be able to cope because salaries do not go up at the same rate. Businesses are going to end up introducing short-time and sending you home during load shedding, because of production lost - then what?” said Selbourne.
She said people were too complacent and it was time the public took a stand against “unjust living costs”.
At present many customers were getting a mere four units of electricity for R10, which is all many families could afford to buy daily, said Selbourne.
STOP COCT founder Sandra Dickson added: “The tariff increase for Eskom-supplied areas announced today is 18.65% and is effective from April 1 2023 until March 2024 31 .
The municipal tariff increases which are effective from July 1 2023 will be more than this 18.65% Eskom tariff increase announced today.
Against the backdrop of severe economic decline in South Africa and deteriorating delivery of electricity by Eskom, Nersa awarded Eskom a huge tariff increase, which is more than twice the current inflation rate for the country. Despite users enduring a totally unreliable service from Eskom, they are now forced to pay substantially more for electricity while receiving less for their money.
“It is clear that Nersa did a ‘numbers’ exercise and ignored the hardship Eskom is causing consumers, business and the country as a whole.”
The EFF said the increased electricity prices were a deliberate act to “cut millions of South Africans from access to electricity, as it will be too expensive to afford.
“The poor should not be used as fundraising pawns for the more than R300 billion lost by Eskom through corruption and poor management.
Instead, Eskom should be fixing the collapsing electricity grid system designed by apartheid to exclude blacks. Eskom should be engaged with maintaining and expanding infrastructure to reach all comers of our county.”
Cape Town Mayor Geordin Hill-Lewis said the price hike was “unfair, unaffordable, and unjust”.
“Eskom has alternative ways to raise funds: by reducing their bloated payroll, by cutting suppliers who are over-charging, especially for sub-standard coal, and by ending corruption, including recovering state capture loot.
“In Cape Town, we are working flat out to end our Eskom reliance, diversify energy supply to more affordable power sources, and end load-shedding over time,” said Hill-Lewis.
Independent energy analyst, Hilton Trollip, said: “They need the money, they have to pay the cost of producing electricity, which is salaries, maintenance, fuel.
“They need to get it otherwise they can’t pay their salaries or their bills and the government has to bail them out.”
He said an increase would not solve the electricity crisis but only constituted the money needed to cover Eskom’s running costs.
“South Africa is experiencing an energy crisis. One reason is the decline in the performance of Eskom’s coal fleet which supplies 85% of the power.
“The coal fleet is getting old and the two huge new stations were poorly constructed with a lot of corruption involved so both the old fleet and the new fleet are unreliable,” said Trollip.
Independent energy analyst Clyde Mallinson said while Eskom did not deserve the 30% increase it had requested, it was needed.
“We are in the mess we are in at the moment because we did not take necessary measures in the last 10 years. Forget about maintenance, that compounds it. We haven't been putting in replacement generation; we’ve been hedging our bets that we can squeeze more out of an old coal fleet. There is a significant energy shortage,” he said.
In the short term, he said, there was no possibility of load shedding ending. “The best we can hope for is that we stabilise it where it is. We are going to have to live, work around and mitigate load shedding, while we try to put in the new generation we omitted to do when we should have done it.”
Cape Times