Electricity

When briefing Parliament on its tariff increases and pricing for municipalities for 2016/17, Eskom said that reducing the impact for the poor can be achieved in partnership with local authorities as an estimated 60% of the South African consumers are supplied by local authorities. Eskom, together with government, has in the past implemented several solutions to address affordability for their residential customers. The Inclining Block Tariff addresses the needs of the poor, but has unintended consequences. In 2000, Government announced a free basic service policy. In 2003 the then Department of Minerals and Energy developed the Electricity Basic Services Support Tariff (EBSST) Policy which was implemented in 2003/04. This policy prescribed an allocation of 50 kWh per month provided to all low income households to be funded through the local government equitable share. The obligation to identify indigents, in line with the Constitution, remains with municipalities even in places where Eskom is the direct supplier of energy. In response to questions about illegal electricity connections and how it is going to deal with this, the power utility mooted the idea of compulsory prepaid electricity for all as this would be impossible to steal. Eskom further proposed that it can install the prepaid meters, collect revenue and then pass on to municipalities the portion of collections due to them. This will take away the burden of collection and the municipality will still get their revenue, but Eskom becomes the collecting agent. This will help in solving the problem of payment in the defaulting municipalities. Eskom added it would be happy if legislation is introduced that allows the utility to appeal certain decisions made by the National Energy Regulator of South Africa.