GOOD Statement by Brett Herron,
GOOD Secretary-General & Member of Parliament
12 January 2023
The dire state of Eskom, and its troubled finances, continue to come down on already struggling South Africans, this time with a 18.65% hike in electricity tariffs for the 2023/24 financial year and a 12.74% increase in the year thereafter.
The National Energy Regulator of South Africa announced the above inflation increase today following Eskom’s application for a 32% tariff hike for 2023/24.
The reality is that Eskom is in a debilitating financial crisis while also struggling to keep the lights on.
The electricity tariff increase will be a very bitter pill to swallow especially because Eskom requires more revenue to cover its operating costs and debt but we don’t even have a stable electricity supply.
For consumers – residential and business – it’s a triple whammy. The inability of Eskom to provide a continuous electricity supply has serious economic consequences and now we must pay more for what little we get. Then there is still the municipal mark-up on electricity tariffs. Municipalities are over reliant on profit-making from electricity sales to balance their budgets.
Now is the time for municipalities to reduce their operating costs, cutting excess and waste, and their reliance on profit making from electricity sales. Electricity is a basic service which should not be priced out of reach for households.
As Councils across the country prepare their 2023/24 budgets, which come into effect on 1 July 2023, they must assist their consumers by restructuring their budgets to avoid large and unaffordable mark-ups on the costs of electricity.
The local government funding model, as a whole needs, to be revisited to avoid basic services, such as water and electricity, being a financial lifeline for municipalities.
The tariff hike is once again a reminder that Eskom needs to implement an effective financial plan for the maintenance and rehabilitation of its power plants, while increasing its generation capacity to provide sufficient power to South Africa, currently in the grips of stage 6 power cuts.
This will require sustained action from government to ensure our transmission capacity is expanded and able to support additional power into the grid and ideally from an increasing proportion of renewable energy sources.
The longer it takes to stabilize Eskom, the longer power cuts will continue to cripple our economy and efforts to reduce poverty and inequality.
Media Enquiries:
Brett Herron, GOOD Secretary-General & Member of Parliament
Cell: 0825183264
Email: bretth@forgood.org.za
Janke Tolmay, GOOD Media Manager
Cell: 0733671223
Email: janke@forgood.org.za