Public left powerless

18 October 2009

Cash-strapped South Africans will have to work even harder to reduce their electricity consumption and, somehow, prepare for proposed massive Eskom tariff hikes.

Power bills are set to triple in the next three years, and local ratepayer organisations are concerned that many people will face severe financial difficulties and could be forced to sell their homes or businesses amid the spiralling costs.

To counter this, homeowners will have to consider power-saving measures, including the use of solar power.

Concerns have also been raised about how other costs, including essentials like clothing and food, could rise with electricity costs.

Despite receiving an electricity hike of 27 percent in 2007/08, followed by another of 31 percent in 2008/09, Eskom announced this week that it intended to drastically increase the price of electricity by the 2012/13 financial year.

The country's electricity distributor has asked the National Energy Regulator of South Africa (Nersa) to phase in the increases, giving two options:

# First, that tariffs increase by 45 percent a year for three years, and

# Second, that there will be an initial increase of 146 percent next year, followed by two consecutive years in which tariffs will be increased by 12 percent.

If either option is chosen, electricity charges in the 2012/13 year will be four times higher than they were in 2008, and triple what they are now.

Apart from a general reduction in power usage, including switching off lights and unplugging non-essential appliances, many homeowners will have to consider investing in long-term power-saving products to counter the increases.

With geysers and swimming pool pumps considered among the biggest power guzzlers, linking these to solar panels - at a start-up cost of between R15 000 and R20 000 - could considerably reduce the monthly electricity bill, saving money in the long term. Converting indoor lights to run on solar power will cost in the region of R2 000, but will also result in monthly savings.

On the plus side, Eskom does subsidise between 15 percent and 30 percent of the costs to install solar powered geysers.

Lilian Develing of the Combined Ratepayers Association of Durban, said that the proposed increase was "simply untenable".

"Should the increases happen, many people are going to be put out of business and get rid of or downsize their homes.

"This will result in us having more and more poor people, who will have to be subsidised. The Eskom increase is just not sustainable," she said.

Clairwood Ratepayers and Residents Association chairman Rishi Singh agreed, saying that the increases would drive people into poverty.

"What will happen is that the poor will keep on getting poorer. Electricity will become completely unaffordable, and this is wrong because it is a basic necessity," he said.

Singh added that the organisation would write to Nersa and the Minerals and Energy Department to oppose the increases. However, it was ordinary citizens who needed to make their voices heard.

"People have to protest against Eskom. The increases cannot be allowed to happen, and the people need to speak out against them," he said, urging residents to attend public hearings and write to the relevant bodies.

Develing said she wasn't only concerned about the electricity hikes, but also about other cost increases.

"My rates went up 100 percent last year, and again by 10 percent this year.

"Pensioners are having to dip into their capital to pay bills. Food is getting more and more expensive.

"If the only increases were electricity increases, people would be able to cope. But, as it stands, the situation is unsustainable," she said.

Head of the National Consumer Forum, Thami Bolani, said that the Eskom hikes would undoubtedly affect other products and services.

"If the hikes are approved, it would have a significant effect on inflation, ensuring that food and transport prices go up, that people would have to start compromising on children's education, what they eat and how they live," he said.

Cosatu has also weighed in on the matter, describing Eskom's request as "outrageous and insensitive".

The union said if the trend of steep electricity hikes continued, many of the poor would not be able to afford electricity at all, and would turn to more dangerous sources of heat and light, such as paraffin and gas.

"As well as the direct blow to residential consumers, this proposed increase flies in the face of the government's efforts to create decent work through small and medium businesses, many of which will be unable to survive such increases...," Cosatu said.

Original Article Link:

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