The Democratic Alliance is requesting an urgent debate in Parliament on the negative implications of a proposed 25.3% electricity tariff increase will have on the Reserve Bank\u2019s determination of interest rates.<\/p>\n
The National Energy Regulator (Nersa) is set to make a decision whether it will authorise Eskom\u2019s application to hike tariffs by 25.3% on June 29, 2015.<\/p>\n
Eskom needs R32.9 billion to supplement its generation capacity with open-cycle gas turbines and R19.9 billion for its short-term power-purchasing programme and the impact of the increase in environmental levy, according to a Nersa statement.<\/p>\n
The 25.3% comprises 12.69%, which has already been granted, 10.1% for gas turbines and power purchasing, and a 2.51% increase for environmental tariffs.<\/p>\n
From 1 April, direct Eskom customers were charged 12.6% more for electricity and Eskom charges municipalities 14.2% more. Households will only know in July how their municipalities will pass on their tariff increases.<\/p>\n
David Ross, DA Shadow Deputy Minister of Finance, said he has written to the Speaker of the National Assembly, Baleka Mbete, noting the direct adverse effect on the cost of living and our economy\u2019s ability to create jobs.<\/p>\n
“If electricity tariffs were further increased, it would in all likelihood result in an interest rate hike as the inflation outlook would accelerate outside the Reserve Bank\u2019s 3%-6% target band. This means higher cost of living for every South African, as food and transport costs would increase significantly,” Ross said.<\/p>\n
In his sternest warning yet, Reserve Bank Governor, Lesetja Kganyago, last week said that leaving interest rates unchanged \u201ccannot be maintained indefinitely\u201d, and that the interest rate outlook depends largely on Nersa\u2019s decision whether or not to grant Eskom an additional 12.6% tariff increase. Nersa is expected to make a decision on 29 June.<\/p>\n
It is estimated that a 15% to 25% increase in electricity tariffs will cost the economy approximately R10 billion – R16 billion.<\/p>\n
“While Eskom continues to pose a major risk to our economy in the form of unending power outages, increased inflation as a result of additional tariff hikes will further constrain the economy\u2019s ability to grow and create the millions of jobs unemployed South Africans so desperately need,” the DA finance lead said.<\/p>\n
“The message from government is clear \u2013 South Africans must pay the bill for its inefficiency. This cannot continue any longer.”<\/p>\n
“It is high time for Parliament to exercise its oversight role in this regard, and a debate on this matter is of utmost importance,” Ross said.<\/p>\n
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