SA could have priciest power

Johannesburg - South Africa could have the world's most expensive electricity if Eskom gets its tariff increases, an economist said on Thursday.

South Africa's electricity is more expensive than electricity in the US, Israel and Mexico and if Eskom gets its 45% increase every year for three years, SA will have the most expensive electricity in the world," Mike Schüssler told a presentation on Eskom in Johannesburg entitled Recovery or Eskom.

"We keep being told that we have the cheapest electricity in the world and this is not the case. Let's start calling Eskom's prices the most expensive in the world and change the public's mindset."

From 2005 up to the present, electricity prices had increased 91%, while inflation rose only 35% over the same period. Schüssler said electricity prices were set to increase around 200% over the next five years.

"This means that between 2005 and 2014 electricity prices on the current proposal would have increased 633%."

Schüssler noted, however, that income from residential properties and businesses for electricity went not only to Eskom.

Eskom had a revenue of over R53.6bn in the year to March 2009, while municipalities' gross revenue from electricity was about R32.9bn for the same period."

That, he said, was a total R86.5bn or about 3.7% of gross domestic product.

The average municipality household paid about R365 per month in 2008, while Eskom customers paid an average of R124 per month.

"There are now over 12.3 million electricity accounts in South Africa. By comparison, there are only 1.8 million mortgage accounts in South Africa.

"This means that the effect of an electricity price hike is felt by 6.7 times more by consumers," Schüssler said.

- Sapa