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Media Centre  |  COSATU Press Statements

COSATU rejects Electricity Price Hikes

21-12-07

COSATU condemns the National Electricity Regulator (NERSA) for giving permission for ESKOM to increase electricity prices by 14.2%. COSATU is seriously concerned at the proposal to finance Eskom's accelerated capital expenditure programme through the impos ition of drastically increased tariffs on poor households that continue to struggle to meet daily energy needs.

A primary concern for COSATU is the impact that this would have on access, delivery and affordability of a key component of the overall package of basic services for the poor. In contrast to the rest of South Africa, poor households, in particular those in the former Bantustan areas continue to face massive challenges in access to energy for basic household activities. According to the General Household Survey, over 80% of households use electricity for lighting, while in the former Bantustan areas only 68% of households use electricity for lighting, with 26% still using candles for the same purpose. Only 30% of households in those areas use electricity for cooking, with a massive 42% of households in the same areas relying on wood for cooking. In addition t o these massive development challenges that continue to face South Africa, many households continue to face periodic electricity cut-offs due to affordability as a result of unemployment and continued poverty.

COSATU believes that any price hike must be discussed in the context of these challenges. It is important to ensure that South meets its energy demands but this must not be passed on to already hard pressed consumers and poor households. In our view there has been insufficient consultation and discussion of the variety of alternative funding mechanisms (including possibly employing a combination of funding mechanisms) available, as compared to the current proposal of simply imposing a blanket tariff increas e. Many of these may be more successful in addressing important principles of cross-subsidisation, ensuring universal access to free basic electricity services and consumption patterns. This should be achieved without compromising the main premise of adopt ing and implementing an energy policy that is development-oriented.

While we appreciate the efforts made by NERSA to consult the public, we believe that these have not been adequate, especially within the narrow time constraints imposed, including the consideration of alternative proposals on meeting our growing energy dem ands. There is very little transparency and public awareness of the impending proposed tariff increases, and is therefore likely to be met with considerable resistance at grassroots levels.

COSATU demands an extended consultation process and a a freeze on price hikes until all options have been considered.

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