On Wednesday, 28 September 2022, the Executive Mayor of George, Ald Leon van Wyk wrote to the National Energy Regulator of South Africa (NERSA) to petition against Eskom’s proposed electricity tariff increase of 32% in the 2023/2024 financial year.
The letter to NERSA is as follows:
As Executive Mayor of George Municipality, I am writing to you on behalf of the citizens of George, to appeal to you not to grant Eskom’s application to increase the price of electricity by 32% in the 2023/2024 financial year,” his letter read to NERSA.
“In my letter addressed to you earlier this year on the question of Eskom’s increases for 2022/23, I stated that our citizens are not able to afford increases at a level above the inflation rate. It is unfair, unaffordable, and unjustified to expect citizens to pay increases substantially above the inflation rate.
Across the country, we are already burdened with high food and fuel prices. The recent hefty interest rate hike adds to the high cost of living making it even more difficult for citizens to make ends meet. Moreover, the requested increase will further cripple businesses financially that are already struggling to operate profitably, and to sustain and create jobs. It will destroy the hope of economic recovery in South Africa and add to our burden of poverty.
On behalf of George Municipality, I am therefore objecting in the strongest possible terms to any increase in the price of electricity that is above an inflation increase. We, accordingly, appeal to the National Energy Regulator of South Africa (NERSA) to reject the proposal.
The price of electricity has risen by more than 500% over the past 16 years, far exceeding inflation over that time. Over this period in which electricity has become steadily more expensive, the security of our electricity supply has progressively become more unreliable. This year is already the worst year of load-shedding on record. The Stage 6 load-shedding we have experienced in the last short period destroyed R4,2 billion in value from our South African economy each day.
It is unacceptable that Eskom is trying to shield itself from the commercial consequences of years’ worth of mismanagement and poor maintenance of its infrastructure by drastically raising its prices at the time that it is least able to supply electricity to the country. Consumers correctly do not understand the logic of Eskom requesting a 32% increase when it is unable to reliably supply electricity. It would therefore be an unspeakable injustice to burden struggling South Africans even further by making them Eskom’s financial scapegoat.
It is now the time, however, that Eskom undertakes the drastic measures needed to reduce the bloated salary bill, stop the mismanagement, inflated tenders, corruption, etc. and recover the outstanding debt not being paid by defaulters. The municipalities that are up to date with their Eskom account are burdened with huge increases because of the many municipalities that have huge outstanding debt owing to Eskom.
We have not seen meaningful progress on any of these aspects, and yet Eskom is still willing to make ordinary South Africans pay for its lack of action. NERSA must reject this application and insist that the remedial action be implemented.
At George Municipality we have committed ourselves to work tirelessly to bring down the cost of electricity for our citizens through the procurement of our own generated electricity from cheaper sources than Eskom. Our Council has approved the necessary funding for these projects to source up to 15% of our daily off-take from Eskom within the next three years.
Our Municipality is fully aware of the challenges facing Eskom and is working with all stakeholders to find acceptable solutions for businesses and domestic consumers. There are large commercial undertakings and hospitals (as examples), that operate on a 24-hour basis, that are being drastically affected by the ongoing load-shedding. They look to the Municipality in an endeavour to find solutions that will enable them to stay in business. An increase of 32% would send the wrong message to all electricity consumers.
NERSA should rather endeavour to work with the private sector and those Municipalities capable of procuring alternative sources of electricity by only permitting inflation-based tariff increases to ensure that there is a focus on bringing additional electricity online over the next three to four years to assist with the supply constraints faced by Eskom.
I trust that this letter will receive your urgent attention and ensure that Eskom’s application for a price increase is limited to the increase in the consumer price index.