ENERGY EXPERT, MTHUNZI LUTHULI SAYS ESKOM TARIFFHIKES’RIDICULOUS

By Ml. Luqman Skink, INX Prime News and Current Affairs Editor

Electricity minister Kgosientsho Ramokgopa was the keynote speaker at the recently held South African Wind Energy Association, WINDABA. The event is Africa’s premier wind energy event and it is of no surprise that electricity pricing was one of the discussions delegates were most keen to hear about.

The 13th edition was held over two days at the Cape Town International Convention Centre (CTICC) where discussions were held to advance the continent’s renewable energy agenda. South Africa’s renewable energy sector is set for a major role in the country’s energy mix as Independent Power Producers as they bid to supply 5,000 Megawatts of power under the Bid Window 7 issued by government.

Minister Ramokgopa told a media briefing at WINDABA that government will firmly oppose Eskom tariff hikes of more than 20%. In August, The Pietermaritzburg Economic Justice and Dignity (PMBEJD) group said Eskom’s double-digit price hikes—and the subsequent hikes from municipalities are leaving SA households having to choose between having power or having food to eat.

'COST REFLECTIVE TARIFFS AN EXCUSE BY ESKOM'

Energy expert, Mthunzi Luthuli told INX Prime that we must interrogate the justification Eskom has used to demand cost-reflective tariff hikes.

“When Eskom says they want tariffs to be cost-reflective, we should interrogate what those costs are. The electricity user and taxpayer should only be paying for prudent costs. And they should not be paying for wastage, corruption and inefficiencies incurred by Eskom management.”

WHEN IS ESKOM GOING INTO THE BLACK?

A question that many South Africans are asking is why Eskom, which has benefited from several government bailouts, and has been rewarded with massive tariff hikes by NERSA, is yet to turn a profit?

Luthuli said in his view, Eskom is being used as a cash cow by private sector players who are milking the state-owned entity. There are no incentives to cut costs or manage the parastatal properly and this was one of the main reasons why it is still in the red.

THE PUBLIC INTEREST VS PRIVATE INTERESTS

Luthuli said he suspected that something else more sinister could be at play in Eskom’s ridiculous pricing saga.

“How can a company that has increased its tariffs by 800 percent in just 15 years still want another 36% tariff hike? It’s simply ridiculous! What is happening here is an attempt to inflate the unit price of electricity so that when private players enter the sector, there will be money to be made.”

SOCIAL AND POLITICAL STRIFE

Luthuli said people should take to the streets to fight what he described as a treasonous act by the government. “Clearly the checks and balances are not working and it’s high time people take their disgust at what is happening to the streets.”

MOVING OFF THE GRID

The move towards solar power picked up momentum with South African households during the dark days of load shedding. Is going off the grid a viable option for people who might want to avoid exorbitant tariff hikes?

“Only the rich and commercial and industrial businesses can afford to go off-grid. However, the average person in Soweto cannot afford the R150,000 it will cost to install a decent home solar system.”

Luthuli explained that South Africa will run the risk of worsening its status as the world’s most unequal society.

ELECTRICITY AND ECONOMIC DEVELOPMENT

Luthuli said there is a crucial link between a country’s energy consumption and the rate of its economic growth. He explained that it is no coincidence that the most developed nations on the planet also happen to consume the most energy.

He expressed the fear that if the skyward trajectory on energy costs continues, government and Eskom would be responsible for dampening South Africa’s own economic growth.

“There are far too many socio-economic problems that need solving in South Africa. At the top of the list is one of the world’s worst unemployment rates. If the country’s energy is not properly secured, our economy may stagnate or even get worse.”

How can ordinary South Africans avoid paying exorbitant prices to keep the lights on in our homes, businesses, and industries?

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