The Independent Municipal and Allied Trade Union (IMATU) is disappointed by the National Energy Regulator South Africa’s (NERSA) decision to grant ESKOM an 8% increase in electricity prices in each of the next 5 years.
“Eskom originally asked for a staggering 16% increase in electricity prices per year for the next 5 years. While NERSA only granted ESKOM half the percentage increase they requested, the 8% increase will still more than double the current price, from 61c a kilowatt hour in 2012/13, to 89c a kWh in 2017/18,” explained IMATU Deputy General Secretary, Craig Adams.
In spite of the utility confirming that it was struggling to meet rising demand and perform scheduled maintenance simultaneously, ESKOM continued to justify its exorbitant increase proposal on its need to cover the costs of supplying electricity and invest in infrastructure.
“As demonstrated by our negotiators throughout last year’s local government sector wage negotiations, household electricity prices are a key inflation driver in our economy. This increase will not only mean less disposable income in our members’ pockets, but the knock on inflationary increases equate to an overall increase to the costs of living and probable job losses,” stated Adams.
“IMATU cannot condone an above inflationary increase in the price of electricity every year for the next 5 years. Workers are consistently told by their employers that an annual 6% salary increase is sufficient to cover their increasing costs of living; yet ESKOM is expecting individuals to pay above inflation prices. These increases will not only affect rate payers, but will also have a significant impact on the poor and unemployed in the form of increased goods and services prices,” commented Adams.
IMATU remains concerned that higher electricity prices will lead to job losses. Higher electricity prices mean increases to the costs of doing business. These proposed increases will have a direct impact on small, medium and large business, which have historically retrenched workers in order to maintain profits and sustain additional operating costs.
“It is also important to remember that Municipalities are allowed to request an additional percentage over and above the increases granted to ESKOM, to cover administrative, infrastructural and collection costs. Therefore the real increase to the consumer is expected to be far more than the 8% increase approved by NERSA,” concluded Adams.