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Summit seeks smooth road to electricity price hikes
May 16, 2008
Johannesburg - Proposals to phase in electricity price increases over five years and to include differentiated pricing for the poor would be discussed during closed sessions at a summit in Sandton on the electricity crisis on Friday.
The proposals, prepared by government, labour, the ANC and community forums, through Nedlac, would then be presented to the National Energy Regulator of SA (Nersa), Nedlac chairman Herbert Mkhize told delegates.
Eskom could then be asked to revise its application to hike prices by 53 percent. These submissions would help Nersa decide on which increase to approve.
Government said that it preferred a 35 to 40 percent tariff increase for 2008/9 and believed that Nersa should make municipalities also adopt the proposed differentiated tariffs for the poor.
This was to reach a price level of 46 cents per kwh by 2012.
Speaking on the sidelines of the conference Winnie Madikelzela Mandela expressed concern over the impact that load shedding and rising prices has had on the poor.
"Nobody has thought of the poorest of the poor. Women are the worst victims."
She said those who run small shops and spazas had lost everything.
"They depend entirely on electricity to make ends meet."
Earlier ANC secretary general Gwede Mantashe said Eskom should not be granted a price increase merely to compensate for previous under-performance.
"We must not allow that, we should look forward," he said.
South Africa had once had an over supply of electricity and used its low prices to attract investments.
Circumstances had changed but the economy could not afford a sharp spike in prices.
Individuals should also not have to bear the burden of this.
"The increases we come up with must be nominal," he said.
Minerals and energy Minister Buyelwa Sonjica said electricity price increases must be treated with sensitivity.
"It is a fact that electricity cannot be treated as another commodity; it is a key input into our economy and is a basic need for most households.
Any price increase therefore is to be treated with sensitivity and subjected to consultation with all the affected stakeholders."
The Congress of SA Trade Unions general secretary Zwelinzima Vavi said it pained him to say that they accepted that an increase was necessary.
"But we can't simply write a blank cheque for Eskom because they are telling us their costs are rising."
He said a better understanding of the issues behind Eskom's application for a 53 percent increase was needed. - Sapa
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