Cape Town - City of Cape Town Mayor Geordin Hill-Lewis is calling on Eskom to formally withdraw its application to increase the price of electricity by 20.5% in the 2022/2023 financial year.
In December, Eskom chief financial officer Calib Cassim confirmed that the power utility had applied for an electricity price increase of 20.5% for the financial year, which commences on April 1, 2022.
The mayor made the call as the public participation period to comment to the National Energy Regulator of South Africa (Nersa) will be closing on Friday. The authority must adjudicate the electricity tariff application by February 25.
Hill-Lewis said that he wrote to Eskom’s CEO André de Ruyter on Wednesday asking him to withdraw the power supplier’s application and also suggested that Eskom’s application could be revised to bring the planned increase in line with inflation.
He said that Capetonians simply could not afford the increase, calling it “unfair, unaffordable and unjustified”.
“Like the majority of South Africans, many Capetonians are struggling to make ends meet. The pandemic and national lockdown led to the closure of hundreds of businesses in our City and the loss of thousands of jobs.
“Our residents are faltering under the burden of the rising costs of energy, fuel, food, and basic consumer goods.
“The consumer price index (CPI) is currently stated as 5.5%; this would have been a more reasonable tariff increase for Eskom. The price of electricity has risen by 307% over the past 13 years, far exceeding inflation,” Hill-Lewis said.
The mayor highlighted how, despite paying more for power, 2020 and 2021 were two of the worst load shedding years on record for South Africans.
Hill-Lewis also acknowledged while Eskom clearly needs to take further urgent steps to reduce its debt and improve its financial sustainability, “passing the bill on to struggling consumers should not be the default solution”.
Several alternative strategies have been suggested to Eskom which include:
- Urgently reducing Eskom’s bloated payroll;
- Cancelling tenders with unscrupulous suppliers who provide Eskom with goods and services at massively inflated prices;
- Ending corruption and mismanagement (irregular, fruitless and wasteful expenditure cost the utility R14.6 billion in 2020 and R7.4 billion in 2019);
- Recovering money that has been looted during the period of state capture; and
- Adopting a greater focus on recovering debt from defaulters rather than targeting those who are paying their bills, who have in effect become ‘soft targets’.
“The law requires the National Energy Regulator (Nersa) to table the 2022/23 price determination in Parliament by no later than 15 March.
“This means there is still time for Eskom to urgently revise its application. The City will petition SALGA members, Nersa, and other stakeholders to oppose Eskom’s application if they fail to revise it,” Hill-Lewis said.
“It is an extreme injustice that ordinary Capetonians — and, indeed, residents of every municipality in the country — will be forced to bear the cost of Eskom’s inability to fix its own problems.
“Moreover, the planned increase will further limit struggling businesses’ ability to operate profitably and to sustain and create jobs,” he added.
“It will destroy hope of economic recovery in South Africa and add to our burden of poverty.
“I hope that Mr De Ruyter will do the right thing and withdraw Eskom’s application for the price hike immediately.”