No to any increase in municipal electricity prices, says OUTA

South Africa can’t afford municipal price increases while dealing with the disastrous fallout of the Covid-19 pandemic.

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09/04/2020 07:33:31

                                                                                                                                                                                                                      South Africa can't afford any increase in municipal electricity prices

                                                                                                                                                                                                                      OUTA is calling on the National Energy Regulator (NERSA) to block any increases in municipal electricity tariffs.

                                                                                                                                                                                                                      NERSA is considering how much the municipalities will be allowed to increase the price of electricity to their customers on 1 July 2020. The regulator’s proposal is for an increase of 6.24%. This is based on the previously approved average increase in Eskom’s prices of 8.76% and Eskom’s increase in the price of bulk electricity to municipalities of 6.9%.

                                                                                                                                                                                                                      The municipal increase is calculated on the assumption that 74% of a municipality’s electricity costs are buying bulk electricity from Eskom and the rest of the costs, which include salaries, repairs and maintenance, will increase at a lower rate than the bulk electricity increase.

                                                                                                                                                                                                                      NERSA’s deadline for comment from the public on the proposed increase is 9 April.

                                                                                                                                                                                                                      OUTA is making a submission to NERSA, calling for no increase in municipal prices this year.

                                                                                                                                                                                                                      OUTA’s submission is here.

                                                                                                                                                                                                                      OUTA has set up a petition which the public can sign, supporting this call for no municipal price increase. You can sign the petition here.

                                                                                                                                                                                                                      NERSA’s proposal on the municipal price increase is here and call for comment is here.

                                                                                                                                                                                                                      Eskom has informed the investor world that it doesn’t need any more money from the state, but OUTA remains cynical. Eskom admits it has lost about R4 billion in revenue due to the current lockdown. Eskom has basically two forms of income: government bailouts and revenue raised from tariffs.

                                                                                                                                                                                                                      Electricity pricing rules allows Eskom to return to NERSA and demand that electricity tariffs rise so that the public pay for any revenue that Eskom has for various reasons failed to generate in a previous year.

                                                                                                                                                                                                                      Covid-19 has caused pain and suffering to South Africa and it would be an unfair blow to South Africans to have to absorb further electricity prices increases while dealing with the effects of this pandemic. We all had to take some pain for team South Africa during the pandemic, so Eskom should absorb these losses.

                                                                                                                                                                                                                      Picture: PxHere

                                                                                                                                                                                                                      OUTA is a proudly South African civil action organisation, that is purely crowd funded. Our work is supported by ordinary citizens who are passionate about holding government accountable and ensuring our taxes are used to the benefit of all South Africans.