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Salga rejects Eskom’s request for another electricity price hike

The association says Eskom’s demands will not only exacerbate debt owing by municipalities, but also force more paying customers to move off the grid.

The National Energy Regulator of South Africa 0n 14 January 2019 held public hearings on Eskom's request for another electricity price hike. Picture: @NERSA_ZA/Twitter

CAPE TOWN - The South African Local Government Association (Salga) says it can't support Eskom's request for another electricity price hike because of the undue burden it will place on already struggling consumers.

It says Eskom’s demands will not only exacerbate debt owing by municipalities, but also force more paying customers to move off the grid.

Countrywide hearings on Eskom's request for a 15% annual increase for the next three years started in Cape Town on Monday, with Eskom telling the National Energy Regulator of South Africa (Nersa) that it's in a debt spiral.

Salga is sceptical that a double-digit electricity price hike will pull Eskom out of its debt trap.

The association's Nhlanhla Ngidi says Eskom has been singing the same tune for years, and consumers can't be made to repeatedly bear the brunt.

“There’s too much burden hanging over South African customers.”

Municipalities owe the power utility almost R20 billion and Ngidi says this will worsen when consumers can't afford to pay.

“Poor people go back to paraffin with grid. Those who can afford it they are thinking about solar and other energy sources that they can use.”

Salga says Eskom has to be more realistic about its sales forecasts, rather than try to claw back the shortfall from cash-strapped consumers.

Meanwhile, Organisation Undoing Tax Abuse (Outa) says consumers should not have to pay the price for corruption and poor leadership at Eskom.

The organisation says at best, Nersa should not grant Eskom more than an inflation-based price hike.

Outa says South Africa is not yet ready to transition to cost-reflective tariffs given its socioeconomic position, which is characterised by high levels of unemployment.

(Edited by Mihlali Ntsabo)

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