"We need to catch up to the tariffs required for Eskom to be able to sustain a bigger and more structurally sound infrastructure, which we don't have at this stage," said George Glynos, an economist at market analysts ETM, speaking to the
Sunday Independent.
In the meantime the NCF has said it will ask the
National Energy Regulator of South Africa (Nersa) to reject the state-owned power provider's request for a rate increase.
Eskom is now using contradictory arguments to push for more price increases, expecting consumers to keep paying more even while the economy shrinks, spending slows and jobs are lost, said the NCF in a statement.
NCF chairman Thami Bolani said that Eskom had this time last year argued that a positive economic climate - which caused unexpected growth in energy usage - was the reason for getting consumers to pay more.
"Now, Eskom wants another major hike in prices, but for precisely the opposite reason," he said. "They say they want a 34% increase because the economic climate has worsened. So we want to know if there any economic conditions under which Eskom will not request unreasonable increases in electricity prices?"
The
Congress of South African Trade Unions (COSATU) had already expressed alarm at the request last week.
"Such a massive increase would inflict misery on thousands of poor households, especially as there is not yet a tariff policy that protects poor consumers, many of who would have to give up
using electricity at all, faced with such a rise in their cost of living," Cosatu spokesman Patrick Craven said in a statement on Friday, reported on IOL.
The report continues to give a bit of background on the request for the price hike:
Eskom has applied for the tariff increase as an "interim" move pending finalisation of the funding model for its capital expansion programme.
Eskom spokesman Fani Zulu said the utility intended applying for another price rise later in the year, once a new three-year funding model, which took into account its capital expansion programme, had been developed and implemented.
South Africa has previously suffered several months of rolling black-outs as the utility attempted to prevent a severe power shortage. It is now looking at long-term solutions to increase its power production.
The public has until 2 June 2009 to comment on the application and a public hearing will take place on 8 and 9 June. Details are on Nersa's web site.
www.nersa.org.za The regulator has said it needs to make a decision by 25 June for implementation on 1 July 2009.
