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EIUG: Electricity increases prohibitive

Oct 23 2012 16:51

Johannesburg - Eskom's application to raise electricity prices came under fire from the Energy Intensive Users' Group (EIUG) on Tuesday.

The increases were "prohibitive" and would heavily impact on industry, commerce and domestic users, the group said.

"South Africa must, as its top priority, seriously examine the cost of electricity to its productive sector, failing which, no one will be able to afford electricity."

The EIUG represents the largest users of electricity in the country, including mines and heavy industry.

The increases would lead to the loss of existing production capacity, constrain new growth, and result in job losses.

Maintaining subsidised services at the expense of jobs would be a grave miscalculation, EIUG said.

Two issues needed to be addressed.

"The inefficiencies in the current production and use of electricity must be addressed in order to remove significant, uneconomical costs.

"The taxes and levies in electricity that have nothing to do with electricity must be removed and brought under control."

EIUG commended Eskom for improving the transparency of its application.

Eskom's application for a 16% increase in electricity tariffs every year for five years would result in the cost of energy more than doubling from 61 cents a kilowatt hour to 128 cents a kWh in 2018.

eskom  |  tariff hikes

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