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Featured image: Eskom

On Wednesday, the National Black Consumer Council (NBCC) said that they are against state-owned utility Eskom’s proposed application for a 20% tariff increase in 2018.

Engineering News reported  that the NBCC has called upon the National Energy Regulator of South Africa (Nersa) “to reject the troubled power utility’s application and rather grant it “a 0%” tariff increase.”

Tariff increase

The South African utility has requested a 19.9% tariff increase to come into effect in 2018.

This proposal saw a disappointing response from the Nelson Mandela Bay Business Chamber. Read more…

The Business Chamber explained in a statement that an increase “of this magnitude as crippling in the current economic climate and, if implemented, the proposed increase could have disastrous consequences for local business and the economy.”

Nelson Mandela Bay Business Chamber President Thomas Schaefer said a 19.9% increase would be commercially devastating in the current economic climate.

The statement highlighted that “the 19.9% increase is expected to translate to a 27.5% municipal tariff adjustment on July 1, 2018.”

“Not only will such an increase be crippling, but in view of the recent disclosures and reports regarding rampant maladministration and governance failures at Eskom, business and commerce is compelled to continue in its endeavours to hold both Eskom and the Regulator accountable for their actions, in the interest of the public,” Schaefer said.

Eskom report needs clarity

“In a statement NBCC secretary general, Ray Russon, said the Eskom report was written in such a way as to obfuscate important detail in a deliberate attempt to hide information from the ordinary consumer,” Engineering News said.

Russon said Eskom had “dismally failed to convince us” that it has put sufficient effort to manage its escalating costs and has failed to provide a cost containment strategy.

“Eskom’s explanation on why it cannot turn off turbines during off-peak hours to match demand is disingenuous and its explanation of how its excess supply should translate into increased tariffs is astounding to say the least,” Russon said.

“The prediction that demand will decline due to economic conditions makes little sense because there are indications that the economy is showing signs of an upturn.”

Engineering News cited Russon who said that Eskom must be granted “a zero increase” in tariffs for the year 2018/19 because the judicial inquiry on State capture must be completed to determine all the problems that have happened in the country’s state-owned enterprises, especially Eskom.

“Eskom must provide a convincing case of cost containment. As a public utility, Eskom must focus of service delivery to the public instead of megaprofit,” Russon said.

“We therefore urge Nersa to reject the Eskom proposal and grant a zero increase for the year 2018/19.”

 

Featured image: Stock