Salga said it is concerned that the price of electricity has risen by more than 300% in the past 13 years while the supply has not been consistent.
THE SOUTH African Local Government Association (Salga) says municipalities across the country are collectively owed more than R300 billion for electricity by residents and businesses.
The organisation was speaking after another price hike for electricity was announced.
“Salga reluctantly welcomes the announcement by the National Energy Regulator of SA (Nersa) on Eskom’s fifth Multi-Year Pricing Determination (MYPD5) that the Eskom tariff increase will be 9.61%,” it said in a statement on Monday.
The power utility had requested a much higher increase.
Salga said it is concerned that the price of electricity has risen by more than 300% in the past 13 years while the supply has not been consistent.
“The price of electricity has risen by 307% over the past 13 years, far exceeding inflation, this is despite the fact that South Africans have experienced an unreliable electricity supply,” it said.
It said during Nersa’s public hearing, the basis of Salga’s submission was that the tariff increases proposed by Eskom are unrealistic and unsustainable in light of the economic and social issues currently affecting the South African economy.
“Municipalities are already confronted with insurmountable challenges of high non-payment with businesses, government and households collectively owing over R300 billion for service rendered,” it said.
The Eskom tariff increase will take effect on April 1, 2022, for Eskom customers, including municipalities.
“Salga reaffirms its support for Eskom’s viability as a national strategic asset but calls for the power utility to conduct its business in a manner that is consistent with the government’s economic objectives. There is a need to explore long term solutions and a possible re-look at Eskom’s cost structure, including its coal contracts.
“Salga, therefore, calls for a holistic restructuring of the electricity industry to deal with the persistent challenges in the Electricity Supply Industry (ESI) and for Eskom to aggressively implement cost-containment measures strategies, address corruption and the failing network infrastructure,” said the statement.
