Eskom tariff hike faces opposition

Pressure will be brought to bear on the National Energy Regulator of SA's (Nersa) review of Eskom's application for a 25 percent tariff hike by a coalition of organisations against any increases.

The group is set to team-up to present a united front against the approval of a higher tariff.

The National Union of Metalworkers of SA, Metal and Electrical Workers Union of SA, Solidarity, the SA Equity Workers Association and the umbrella employer organisation in the metal and engineering industry - the Steel and Engineering Industries Federation of Southern Africa, said yesterday that they would meet to consider the implications of Eskom's proposed tariff hike on the sector and on the country's economy.

Trade union federation Cosatu and the Commission for Justice and Peace for the Catholic Bishops also threw their hats in the ring yesterday, calling on Nersa not to grant Eskom its tariff increase.

Eskom last month made an urgent application to Nersa to increase the electricity tariff by 25.3 percent for the 2015/16 financial year, including the 12.69 percent price hike that had already been approved.

"Eskom's crisis is a result of poor management and a 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 (to) the customers, especially the poor," commission chairman Bishop Abel Gabuza said.

Gabuza has called on Nersa to use the current Eskom application to send a strong message to the government and Eskom to address the systemic issues behind the energy crisis.

"Among other things, the government should be encouraged to set up a national electricity crisis council made up of a broad spectrum of stakeholders that include civil society and trade unions, that should be empowered to develop a pro-poor turnaround plan for Eskom and oversee its implementation."

In its application to Nersa last month, Eskom asked for a 9.33c a kilowatt-hour increase from 74c to be effected either at the beginning of July or September, citing a R32.9 billion cost-recovery requirement for its open-cycle gas turbines and the R19.9bn for short-term power purchases.

Yesterday, the acting chief executive for the power utility, Brian Molefe, defended Eskom's application, charging that the utility had only requested 6.4 percent and that 4.7 percent of its claim was a clawback from last year.

Cosatu said the 36 percent unemployment rate, a low 1.3 percent gross domestic product growth in the first quarter, as well as the fact that more than 50 percent of South Africans were living in poverty, did not warrant any electricity hikes.

Business Report