Increase efficiency‚ don't tax consumers - Cosatu tells Eskom

Cosatu has urged the National Energy Regulator of SA to reject Eskom’s application for an increase in the price of electricity.

The trade union federation is arguing that consumers are already overburdened‚ and that the poor and working class have been hard hit by the downturn in the economy.

Cosatu also weighed in on the role and efficiency of the power utility: “Eskom is not a private enterprise but a state owned enterprise with a huge developmental mandate.”

It said it is the government’s “responsibility to ensure financial sustainability of Eskom”‚ implying that Eskom must raise finance in other ways rather than taxing consumers. It also urged Eskom to use the funds it receives from government more efficiently‚ amid charges that Eskom has been doing precisely the opposite.

“The poor will be burdened with huge arrears ‚as they fail to pay their bills and will experience more disconnections and illegal reconnections. The federation represents millions of underpaid ordinary workers‚ who can barely afford these outrageous increases in the prices of basic services‚” Cosatu said in its statement.

The federation also questioned Nersa’s multi-year price determinations‚ meant to set prices for relatively long periods without rises in tariffs.

“Cosatu is also concerned that since the introduction of the multi-year-pricing system for Eskom‚ it has been easy for Eskom to get a further increase before the end of the multi-year-price determination period. This trend has the potential of creating a credibility crisis for Nersa’s multi-year price determination system.”