Free Basic Electricity Final (Low res)

Download this report: Free Basic Electricity Research March 2010

The Report assesses the 50kWh of free basic electricity suggested by
Government for poor households. The rationale of the Free Basic
Electricity (FBE) Policy was to provide “electricity to all” through the
provision of a ‘limited’ amount of free electricity to poor households.
Subsequently, government decided on an amount of 50kWh per household per month.

The Report finds that not only is the amount not sufficient for basic
needs but there is also a problem in the way it is being rolled-out. For
example, in some areas, such as the Ekurhuleni Metropolitan
Municipality, 100kWh of free electricity (instead of the 50kWh proposed
in the policy) is being provided to all households. Other areas require
households to register for the free electricity allocation and therefore
limited to a few households on the indigent list. Furthermore, Eskom’s
current CAPEX programme, rising tariff costs, and spiralling fossil fuel
costs are causes for concern, as the rising costs of energy will leave
poor households in a deepening cycle of poverty and increasing the
danger of economic disconnections.

Given the findings of the Report, Earthlife Africa Jhb thus proposes
that there should be an increase in the amount of FBE to 200kWh per
month per household. In addition, using Eskom’s 2008/2009 statistics of
the amount of electricity used and the cost thereof, the funding model
proposed suggests that in order to fund the increased 200kWh there
should be:

* A rising step block tariff
* Environmental levy ring-fenced for FBE
* A levy placed on high-end users including industrial users

Without any of these in place, the increased tariffs over the next 3
years means that the poor are going to be most affected and thus deepen
the cycle of poverty. As a society, we have to believe that people come
before profits.