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Eskom’s 20.5% Tariff Hike Will Sound Death Knell for Residents, Economy

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Eskom’s 20.5% Tariff Hike Will Sound Death Knell for Residents, Economy

21st January 2022

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Today, accompanied by the MMC for Environment and Infrastructure Services, Cllr Michael Sun, and the Acting CEO of City Power, Tshifularo Mashava, I lodged an objection against Eskom’s request for a 20.5% tariff increase. 

At a time when more than 10 million South Africans are excluded from the economy because of the ever-increasing unemployment rate, the Multi-Party Government finds it implausible that Eskom elects to impose an additional burden on residents who are barely staying afloat.

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As it is, municipalities around the country contend with diminishing revenue because people are out of work and are therefore not able to pay their bills but Eskom aims to heap more misery by demanding an above-inflation tariff increase.

The City has reviewed Eskom’s submission on tariff charges and wants to strongly express its objection pertaining to the proposed tariff hike of 20.5%. It is important to note that the buying price is proportional to the price that City Power sells electricity to its customers.

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The proposed tariff hike, which is far higher than the current inflation rate, would have a devastating impact on the residents of Johannesburg already impacted by the Covid-19 pandemic as well as an economy that is ailing and is said to be on a recovery path. Therefore, the proposed tariff hike would erode business confidence and disrupt much-needed economic recovery.

The City is of the view that Eskom has room to review and revise its proposed revenue of R293 billion down by R36 billion.

Nersa’s approval of Eskom’s request, as is, will only serve to exacerbate the vicious cycle of unemployment and non-payment for municipal services, which ultimately will lead to dwindling incomes, revenues and expenditures.

On the home front, the knock-on effect of this increase will inevitably be that less and less money will go towards groceries and essentials, like school fees. These costs will add to the already high cost of petrol as more companies require their employees to report for work physically.

As a government that cares, our objection to the proposed hike by Eskom demonstrates our commitment to the residents. 

We have heard the cries of South Africans and we are calling on Eskom to listen to the people. 

As the Multi-Party Government, we will be convening an Energy Indaba in March where we will invite Independent Power Producers and other stakeholders who will work with us to ensure that the City is no longer reliant on Eskom.  

These IPPs will not only offer stiff competition to Eskom, but they will also ensure that the City is able to supply sustainable and reliable electricity at affordable prices. In the same breath, I call upon all residents in Johannesburg, and beyond, to help ensure that all outstanding revenue is indeed collected so that we can continue to enjoy reliable supply of electricity.

In closing, I say that South Africans deserve a government that works, and the Multi-Party Government is here to deliver on its promises. 

 

Issued by City of Johannesburg Executive Mayor Mpho Phalatse

 

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