EVER ELECTICITY HIKES, SUFFER THE CONSUMER
Living standards of the average person in the kingdom and the survival of business are at stake with the ever increasing cost of electricity especially when there is no corresponding improvement in supply and infrastructure.
It is even more disheartening when considering the portion of expenditure associated with the wage bill, travel allowances over and above the entertainment provision, not to mention the exit packages. But that is fine with the workforce in the utility sector because it is cushioned from the devastating effects of having to set aside more than half the living wage to cover energy needs for the household. In a country where the existence of effective consumer association is taboo, often the consumer is at the mercy of the either the regulator or the watchdog role of Parliament, which is only effective on the eve of an election. In this country, no one seems to strike the balance between the cost of living and the standard of living and this is further exacerbated by the fact that 10 per cent of the population enjoys 90 per cent of the gross domestic product, hence the status of middle income country. However a majority of our citizens survive on handouts even for such basics as medication. It is still a wonder as to where we would all be were it not for the contributions from the Global Fund in the form of HIV and AIDS, tuberculosis and malaria drugs.
Last year this time Eskom, the major source of nearly all our electricity, sought a 19.9 percent hike for this year. The local distributor, Swaziland Electricity Company, is forever advising the consumer to use the resource sparingly while at the same time logic dictates that sales volume have a meaningful bearing of revenues generated by SEC. But the way it is put is such that the supplier has the negative impact of the hikes at heart, the feel so much for the consumer, a make believe knowing very well that there is little or nothing that the consumer could do to influence favourable price adjustments.
Each time electricity increases, the disposable income falls, so does spending and, therefore, and naturally the gross domestic product plummets. Very few consumers in this country are able to save because apart from the burden of ever increasing electricity hikes, there is also the uncontrollable interest rates as a majority of the working population survives on money borrowed from the banks and the shylocks at every corner. Because the banks have a wholesale licence on charges, they are able to dig even deeper into the earnings of workers leaving them with little or nothing to use as disposable income, which in all other cases is eaten away by electricity. The pressure on the consumer is enormous.
Each time there is a power outage the consumer is hardly alerted, resulting in damaged electrical appliances and spoiled foodstuffs in refrigerators. The supplier is not obliged to apologise or compensate the adversely affected consumer. In some parts of the country such as Nsingweni, Zwide and surrounding areas, residents say they are so used to power cuts that those that afford find generators working more than main power supply.
Some of the strategies to encourage consumers to save electricity in times of imminent load cishalogesi shedding is to use novel slogans like
(switch off the power). In such times, there are scandals filtering in the energy sector, especially from our neighbours whereby directors are said to be profiting by cutting off supply to the uncooperative users and reconnecting to those that have no problem paying huge bribes just to keep production running.
No doubt a power utility needs revenue, maintain or replace assets and to expand to cover its growing market. One way to secure the additional revenue is to increase the tariff. On the other hand the increase in the tariff has an equally devastating effect on the life of the consumer and that of business. Often very little consideration is made to this end because the supplier is worried for its survival and its comforts given the strong legislative protective coat it wears.
In an exploration of the ramifications of increased electricity prices on residential consumers of different income groups by the Rand Corporation in South Africa and other research, it showed that a doubling of the price of electricity is expected to lead to a 50 per cent reduction in overall consumption in the residential sector.
This study finds that the long-term ability of a consumer to reduce electricity consumption increases with income level. High-income consumers are more responsive because they own more devices that have other energy substitutes. Further, they are able to sustain higher outlays for such items as insulation that reduce their electricity consumption. Governmental policies that might increase the price of electricity can be tailored to exempt lower income groups without substantially reducing the overall reduction in consumption. Low-income users represent only a small portion of total consumption and are relatively unresponsive to electricity price increases.
This reminds one of a village in the Eastern Cape when the African National Congress introduced rural electrification to boost voter participation on the eve of some election year over a decade ago. Because the people had sources of renewable energy such as collecting dung and burning it as fuel to prepare meals, they had grown accustomed to living without the luxury of electricity and they commented that they were grateful to the ruling party for bringing the luxury because they could use it to light up their poverty and watch it even at night. They had no other use for the electricity because they were so poor to even afford appliances or think of projects to improve their wellbeing through. Immediately after the election, Esk om announced a hike in the tariff and the people simply could not afford the use of electricity until towards the next election year.