The Independent Municipal and Allied Trade Union (IMATU) condemns Eskom’s latest application for a 25.3% electricity tariff increase and urges the National Energy Regulator of South Africa (NERSA) to dismiss this request.
“Eskom has already been granted a 12.69% tariff increase for 2015/2016 period. Not only is a further increase in electricity unaffordable, but this proposed increase, coupled with all the other cost of living and inflationary increases facing South Africans makes it impossible. As a union representing employees in the local government sector throughout South Africa, we are able to see the effects electricity price increases have on both our members and the municipalities they are employed by,” stated IMATU Research and Policy Analyst, Anja Muller-Deibicht.
IMATU strongly believes that NERSA should reject the re-opener that Eskom is applying for. The utility has not only failed to run its operations in an efficient and sustainable manner, but now expects the costs of these failings to be borne by consumers. Furthermore, IMATU is gravely concerned by the utility’s lack of transparency regarding coal contracts, tenders, executive remuneration and the War Room decisions. “Our members are expected to pay more yet have no guarantees as to when this crisis will end or what alternative solutions Eskom is offering,” commented Muller-Deibicht.
As indicated in IMATU’s submission to NERSA regarding ESKOM’s Selective Reopener of the MYPD3 application, the cost of living expenses such as transport, food, administered prices and medical aid contributions often increase well above inflation. In addition, household debt remains high, with most disposable income being used to service debt, consumers are simply not in a position to absorb the impact of an additional electricity price increase.
Escalating municipal debt is also a serious concern. According to the Local Government Revenue and Expenditure Report (LGRER) municipalities are owed a combined debt of around R94 billion for the 2013/2014 financial year. Over 60% of this figure is attributed to uncollected household debt. Municipalities are already struggling to collect debt, an additional increase will only further squeeze already stretched rate payers and simply prevent others from purchasing electricity altogether.
“Focus needs to be placed on addressing our country’s poor distribution network, aging infrastructure, lack of maintenance and political interference in the administrative running of municipalities. IMATU believes that investment in clean renewable energy generation by municipalities themselves, will result in increased electricity generation, additional revenue, better cross subsidization of poorer municipalities, further training and capacity building within the local government sector,” said Muller-Deibicht.
As a major stakeholder in local government, IMATU is committed to the realisation of an efficient and reliable energy sector and for this reason it is imperative that it forms part of the solution to the current electricity crisis.