Johannesburg – The multi-party government in Johannesburg has rejected power utility Eskom’s request to the National Energy Regulator of South Africa (Nersa) for a 38.1% electricity tariff increase for the 2023/24 financial year.
Environment and Infrastructure Services mayoral committee member (MMC) Michael Sun and officials from City Power attended the Nersa hearings on behalf of the City of Joburg.
“While as a city we have full appreciation that Eskom must be financially viable, but this must not be achieved at the detriment of the residents of Johannesburg,” Sun said.
“If Eskom’s proposed application of a tariff hike of 38.1% is approved, City Power would have little room but to pass through the costs to its customers. This would place further financial burdens on residents within the City of Johannesburg.”
The city said the proposed tariff hike, which is far higher than the current inflation rate, would have a devastating impact on the residents of Johannesburg and on the weak local economy, further eroding business confidence and disrupting the city’s fragile economic recovery.
The multi-party government said it is of the view that Eskom had room to review and revise its proposed revenue down by R55 billion, by reducing the increase for the 2023/24 financial year to at least 18.4%.
“This unrealistic tariff hike proposed by Eskom would put a halt to business and economic recovery and would negatively impact on job creation and the city’s revenue base,” Sun said.
Sun stressed to the Nersa panel that the fight against Eskom’s load shedding blackouts was not just about keeping the lights on at homes. The economic activity and productive hours lost had resulted in big financial losses to Johannesburg, from which it would take many years to recover.
“Therefore, we request Nersa to limit the increase to Eskom tariffs as suggested, and Eskom should rather be encouraged to seek alternative mechanisms to improve its efficiencies and reduce costs,” Sun said.
The Star