Power hike ‘catastrophic’

The Nelson Mandela Bay Business Chamber and the municipality’s political leadership have added their voices to a chorus of objections to Eskom’s proposed 19.9% tariff hike – calling it catastrophic.

Eskom’s application to Nersa requests a general increase of 19.9%, with a 29.5% increase for municipalities.

Written objections to the proposed hike, which would take effect in April and June respectively if approved, were sent to Nersa by the chamber and the municipality last week.

This was ahead of the energy regulator’s public hearing in Port Elizabeth on November 1.

Mayoral committee member for infrastructure, engineering, electricity and energy Annette Lovemore said the proposed increase, if allowed, would jeopardise the future of the city.

“We simply cannot allow Eskom’s exorbitant demands to compromise the future of our city and its people,” she wrote.

“The constitution requires local government to promote social and economic development.

“The growth path for the local economy and sustainable job creation is largely aligned to the availability of affordable and reliable electricity.

“It is imperative, if Nelson Mandela Bay is to have any chance of achieving its future goals, providing opportunity for its citizenry, that the electricity tariffs remain competitive.”

Lovemore said nearly half of the city’s youth struggled with unemployment.

“We have stated that we are open for business – business that can create jobs for our youth [and] we are doing all we can to provide an enabling environment for that business to prosper.

“Should consideration be given to the proposed tariff, the impact on Nelson Mandela Bay and its future will be catastrophic.”

She also said Eskom had a short-term outlook regarding its prospective income.

“An approximate 15% drop in sales over the recent term should be a clear warning that the monopoly is no longer the efficient provider it once was.

“These warning signs, along with the clouds of mismanagement and corruption, are apparently ignored by Eskom decision-makers.

“Eskom’s blinkered attempt to maintain its monopoly will lead to its ultimate failure, but this cannot happen at the expense of local governments such as ours.

“[The] Bay cannot foresee any increase to its residents that exceeds 8%. To achieve this, the Eskom tariff increase must be contained to 5% or below.”

Meanwhile, the chamber said the application needed to be “fundamentally reviewed”.

“The application not only raises the question whether the industry in South Africa will be able to continue sustaining itself, but also whether Eskom will remain viable,” chamber board member MC Botha said.

Eskom’s downward spiral had dire consequences for the country, he said.

“Eskom is plagued by mismanagement and alleged corruption leading to failures to get its operational costs and project management under control.

“In our submission we appeal to Nersa to play its crucial role and discharge its statutory duty by ensuring Eskom gets back on track to achieve its core objective – to provide [affordable] electricity to all South Africans.”

Interested parties who wish to attend the public hearing must submit their request to publichearings@nersa.org.za by 3.30pm on October 23.

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