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Mayor to Nersa: Eskom’s proposed 32 percent electricity price hike is unfair, unaffordable, and unjust

STATEMENT BY CAPE TOWN MAYOR, GEORDIN HILL-LEWIS

Yesterday, 21 September 2022, I gave a presentation at National Energy Regulator of South Africa (NERSA)’s public hearings on Eskom’s proposed 32% electricity tariff increase for next year.

I reiterated what I said to NERSA earlier this year, at the hearings on Eskom’s last enormous price hike — any increase in the cost of electricity substantially above inflation is unfair, unaffordable, and unjust.

I am determined to fight for ordinary Capetonians against this outrageous proposal, a staggering number of whom are already struggling to make ends meet and buckling under the rising cost of living.

While the City is working tirelessly to bring down the cost of electricity for Capetonians through our own electricity procurement from cheaper sources than Eskom, we need Eskom and NERSA to play their part in the meantime.

The price of electricity has risen 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 grown steadily less reliable. This year is already the worst year of load-shedding on record. The Stage 6 load-shedding we have experienced in the last week destroyed R4,2 billion in value from our economy each day.

Eskom is trying to shield itself from the commercial consequences of years’ worth of mismanagement by drastically raising its prices at the time that it is least able to supply electricity to the country. It would be an unspeakable injustice to burden struggling South Africans even further by making them Eskom’s financial scapegoat.

In January 2022, I proposed a list of alternative action steps that would allow Eskom to achieve better financial sustainability without unjust price increases, including:

Urgently reducing Eskom’s bloated payroll
Cancelling tenders with unscrupulous suppliers who provide Eskom with goods and services at massively inflated prices and
Ending corruption and mismanagement (irregular, fruitless and wasteful expenditure cost the utility R14,6 billion in 2020 and R7,4 billion in 2019) and
Recovering money that has been looted during the period of state capture
We have not seen meaningful progress on any of these points, and yet Eskom is still willing to make ordinary South Africans pay for its lack of action. NERSA must reject this.

The City remains committed to working with all stakeholders to find a more acceptable solution to the challenges facing Eskom and the electricity industry.

Source: City Of Cape Town

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