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Cape Town - Opposition is mounting to Eskom's proposed additional tariff hike. The power utility has made an urgent application to energy regulator Nersa to increase the electricity tariff by 25.3% for the 2015/2016 financial year, including the 12.69% price increase that has already been approved.
The Nersa public hearings start on Tuesday.
Fin24 user Johann Marx added his voice to the growing chorus of discontent. He wrote: "Once again the law-abiding, hardworking, tax-paying citizens of South Africa get punished for doing just that."
Referring to pictures taken at informal settlements in Johannesburg showing a multitude of illegal electricity connections, he asked: “Who is paying for the electricity consumption here? Looks like it’s you and me. The hardworking taxpayers are burdened even further, while the 'consumers' get it all for free."
The reason for this, said Marx, is because "it’s the very same 'consumers' that keep the ANC in government at election time, while the taxpayers pay for it all." He continues: "Shouldn’t it be the taxpayers deciding this outcome? Think about this: Tax… a form of punishment to the hard working community… which gives the decision-makers regarding taxes a lifestyle the taxpayers can only dream of… with the money provided by the same taxpayers."
Time for change
There has been a groundswell of opposition to Eskom's latest move from various organisations and analysts.
Energy expert Chris Yelland said Nersa should reject Eskom’s electricity tariff increase because it is “unreasonable, unfair and fundamentally dishonest”. Furthermore, extra costs have not been prudently and efficiently incurred.
READ: Eskom tariff request 'dishonest and unfair' - expert
“All these increases that Eskom is trying to get passed through to the customer are actually a result of Eskom’s own failings,” said Yelland, who submitted his own application against Eskom's bid.
“My belief is that Nersa is not entitled to pass these to the customer in the tariffs and these should be borne by Eskom and its shareholders,” Yelland told Fin24.
Trade union federation Cosatu also said it would not support any further burden on the working class and the poor through high electricity tariffs.
READ: Cosatu joins lobby against Eskom tariff hike
“We argue that 36% rate of unemployment, 1.3% GDP growth in the Q1 of 2015 and the fact that more than 50% of South Africans are living in poverty doesn’t warrant electricity hikes,” the Congress of South African Trade Unions said in its submission to Nersa opposing Eskom's application.
Unfair to pass cost of mismanagement to consumers
The Commission for Justice and Peace for the Catholic Bishops also opposes the proposed tariff increase. In its submission against Eskom’s bid, the commission stressed the unfairness of Eskom’s attempt to resolve its crisis by passing on the cost of its mismanagement on the customers.
“Eskom’s crisis is a result of poor management and cumulative lack of political will to tackle the energy crisis in a comprehensive and sustainable manner. It is unfair to pass on the financial burden of Eskom failures on the customers, especially the poor,” said the commission's chairperson Bishop Abel Gabuza.
READ: New Eskom hikes will hit poor hardest - SA bishops
Business has also voiced its opposition to Eskom's application to Nersa. In a submission to be made to Nersa by the Energy Intensive User Group (EIUG), which represents major companies in South Africa including mining houses, it pointed out that power prices in South Africa have risen 70% since 2010.
READ: Business body strengthens opposition to Eskom tariff hike
A second double-digit increase proposed for this year will make it difficult for the country's businesses to compete internationally, the EIUG said.
However, Eskom remains unmoved. Acting Eskom CEO Brian Molefe made no bones about the power utility's stance, saying South Africans can choose between the pain of higher electricity prices to pay for Eskom’s diesel, or power cuts and damage to the economy.
“If we don’t have the diesel (Eskom needs funding for), then we go into load shedding sooner and it will be more severe,” he said, following a briefing on the state of the country’s power system.
READ: High power prices or power cuts, says Brian Molefe
Nersa will invite the public to make submissions next Tuesday and Wednesday before deciding whether to approve Eskom's application or demand a less severe increase. Public hearings have been scheduled for June 23-24 at the Nasrec Expo Centre in Johannesburg.
Disclaimer: All letters and comments published in MyFin24 have been independently written by members of the Fin24 community. The views are therefore their own and do not necessarily represent those of Fin24.
