Cosatu opposes electricity price hike

The Congress of South African Trade Unions (Cosatu) on Friday condemned the National Electricity Regulator (Nersa) for giving permission to Eskom to increase electricity prices by 14,2%.

“Cosatu is seriously concerned at the proposal to finance Eskom’s accelerated capital expenditure programme through the imposition of drastically increased tariffs on poor households that continue to struggle to meet daily energy needs,” said spokesperson Patrick Craven.

He said a primary concern for Cosatu is the effect that this increase will have on access, delivery and affordability of a key component of the overall package of basic services for the poor.

“In contrast to the rest of South Africa, poor households, in particular those in the former Bantustan areas, continue to face massive challenges in access to energy for basic household activities.”

According to the General Household Survey, more than 80% of households use electricity for lighting, while in the former Bantustan areas only 68% of households use electricity for lighting, with 26% still using candles for the same purpose.

“Only 30% of households in those areas use electricity for cooking, with a massive 42% of households in the same areas relying on wood for cooking,” Craven said.

In addition to these massive developmental challenges that faced South Africa, many households continue to experience periodic electricity cut-offs due to affordability—as a result of unemployment and continued poverty.

“Cosatu believes that any price hike must be discussed in the context of these challenges. It is important to ensure that South Africa meets its energy demands, but this must not be passed on to already hard-pressed consumers and poor households.”

In Cosatu’s view there has been insufficient consultation on alternative funding mechanisms, compared with the current proposal of simply imposing a blanket tariff increase.

Many of these alternative mechanisms might be more successful in addressing important principles of cross-subsidisation, ensuring universal access to free basic electricity services and consumption patterns.

This should be achieved without compromising the main premise of adopting and implementing an energy policy that is development-oriented.

“While we appreciate the efforts made by Nersa to consult the public, we believe that these have not been adequate, especially within the narrow time constraints imposed, including the consideration of alternative proposals on meeting our growing energy demands.

“There is very little transparency and public awareness of the impending proposed tariff increases, and is therefore likely to be met with considerable resistance at grassroots levels,” Craven said.

The Freedom Front Plus (FF+) said on Friday that South Africa has now entered a new era of expensive, unreliable electricity.

The 14,2% increase next year is well in excess of current inflation and justified by Eskom as a way of generating financial capacity for essential expansion, FF+ spokesperson Willie Spies said.

However, despite the increase and the current programme of generation-capacity expansion, energy experts foresee load-shedding continuing for at least 10 years.

Prominent energy expert Andrew Kenny recently estimated it will take 10 years or more before there is a sufficient reserve margin to end load-shedding, which has now become a common occurrence, Spies said.

According to Kenny, this is the result of an acute generation-capacity shortage, steady growth in electricity demand (of twice the economic growth rate) and the fact that it will take at least six years to build the base-load stations needed.

“On the other hand, there is general consensus that South Africa’s electricity tariffs were also relatively low, until recently,” said Spies.—Sapa

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