Eskom 'wants to up tariffs 666%'

Johannesburg - Trade union Solidarity said on Thursday that if the National Energy Regulator (Nersa) grants power utility Eskom's request for tariff hikes of 66% annually over the next three years, electricity tariffs will increase nominally by 666% over the five-year period from the beginning of 2008 to the end of 2012.

The trade union is planning a campaign to oppose further tariff increases above inflation. If Eskom's alternative request for an annual increase of 45% over three years is granted, it would result in a total increase of 410%. A third proposal is for tariffs to be increased by 146% in 2010, with no increases in 2011 and 2012. This would result in an increase of 312% over the five-year period.

According to Solidarity spokesperson Jaco Kleynhans, the trade union is in possession of a document from Eskom that indicates that consumers have already been unable to absorb the sharp tariff hikes of the past two years. "There is a sharp increase in bad debt and consumers will definitely not be able to handle any more above-inflation increases. Eskom and government are acting irresponsibly in shifting the responsibility for their poor planning for the expansion of capacity onto the consumer."

Solidarity will actively oppose Eskom's request to Nersa for tariff increases. "We already have a team of experts working on a counterproposal. We will definitely submit a proposal to Nersa. Meanwhile, we will also activate consumers to voice their opposition to the planned increases," said Kleynhans.

Solidarity is planning to hold a conference on 3 December where the financing model for Eskom's expansion will be discussed. Some of the speakers at the conference will include the well-know economist Mike Schüssler and an expert in the electricity industry, Chris Yelland.

- I-Net Bridge