Electricity price hike ‘ridiculous’

LOCAL residents and businesses expect to be hard hit by the electricity price hike, which comes into effect next month.

Eskom is planning to increase the price of electricity by 25% a year for the next three years, after being granted approval by the National Energy Regulator of South Africa.

In a survey of local businesses, TotT found that retailers and the hospitality industry especially expect to be affected negatively as consumers tighten their belts.

Residents were more vocal in their outrage.
Pick n Pay manager Russell Shelton feels the increase will affect the whole economy. He described the price increase as a vicious cycle which will in turn consume everyone.

“Unfortunately the disposable income that we have will be eaten up further and further as all businesses will have to push their prices up to cover the increase somehow,” he said.

The manager of D&A Timbers, Dave Young, said any business would be affected. He said the increase meant less disposable income and people would spend the money first on lights and water before groceries or hardware, meaning sales would definitely suffer.

Young said he anticipated there would be job losses resulting from the price hike, but believed it would be mainly in the manufacturing and formal sector and unlikely to affect a business like D&A Timbers.
As for the construction industry, Joanne van Rensburg of Roy Bowles Construction felt the accumulating increases rolled out each year would affect the business “big time”.

But she felt water was a bigger issue for the industry than power.
The manager of the Fish River Sun, Wessel Benson, wasn‘t sure how the increase in electricity would affect the hotel group.

“Our costs will definitely inflate but I don‘t see the increase in electricity affecting any jobs at Fish River Sun in the future,” he said.
Smaller businesses seem more likely to be affected. The owner of Flyboyz, Mark Stevenson, said he was paying about R7000 a month for electricity at present.

He feels a continuous increase on electricity is “ridiculous” and will definitely affect business, especially small restaurants in a place like Port Alfred.

“If it was 10% it would be different, but to pay almost R9 000 a month is ridiculous.”
Stevenson believes the increase in electricity will lead to job losses at small restaurants. “If the feet are not coming into the door, you have to make up for your money elsewhere and let someone go,” he said.

A snap survey of people on the street revealed that residents feel even more strongly about the issue.
A former employee of Eskom, Cheryl Gibson is upset by the increase, especially being a pensioner.

“As a pensioner, it will be difficult because we just have a fixed amount to work from,” she said, but she felt her pay-as-you-go account would save her money.

Bjorn and Gundi Heitmann own a farm near Shaw Park and are up in arms about the electricity situation, calling it “absolutely ridiculous”.

Bjorn said this was Eskom‘s easy way out instead of having a plan, to which Gundi added: “It irks me that it‘s always bad planning and bad management. This was foreseeable and it‘s going to affect us, the normal consumers and not the people in the industry.”

“Everyone is definitely struggling since the recession. They could have at least waited till we recovered fully,” said local policeman, Constable Tembahethu Tele.

He said the saddest part is that people who lost their jobs during the recession will still have to fork out the money. “They brought this increase at the wrong time,” he said.

According to a recent news report, Minister of Energy Dipuo Peters said homeowners who use between 351kWh and 600kWh of electricity a month would see an effective increase of 21.95 % from April 1, while those who use over 600kWh a month would have to pay 35.82% more.

Those who use less electricity procured directly from Eskom, could expect to pay less from July 1, with those that use 50kWh or less in a month set to pay 10.59 % less for their electricity and those who use between 51kWh and 350kWh of electricity a month would pay 5.20%less.

Consumers who buy their electricity from municipalities will have to wait until Eskom announces how much it will increase its rates to municipalities.

In the report Peters said the guideline for municipal distributors outlined by Nersa called for a 15.3% increase from July 1 2010, a 16.06% increase from July 1, 2011, and a 16.16% increase from July 1, 2012.

In the same report, the Minister in the Presidency for Performance Monitoring and Evaluation, Collins Chabane said: “If we accept that Eskom is a state utility and the state gets its revenue from the public then whichever way you go, one way or another you will have to find that money from the public, either through taxes or increases in tariffs.” - LIESL AH SHENE