I’d like to suggest a solution to the problem of Eskom needing higher rates and the threat these rates hold for the economy and job creation.
It would appear that everyone agrees on three facts.
One, Eskom is required to make a return on investment, in other words the government gets an income from Eskom at the expense of the public.
Two, municipalities profit out of electricity sales. So a different tier of government gets an income at the expense of the public.
Three, Eskom sells electricity below cost to big industry, so their profits, too, come at the expense of the public.
If we agree that further dramatic increases will damage the economy, surely it makes sense for the government to waive the need for Eskom to make a profit.
By allowing municipalities to make a profit on the distribution and sale of electricity, we run the risk of businesses closing down. If that happens, municipalities will have neither income from electricity sales nor from rates and taxes.
We need the National Energy Regulator of SA to intervene before it’s too late. Why should Eskom prop up certain industries with below-cost electricity at the expense of the rest of us?
Surely more jobs are in danger due to the high electricity prices paid by small businesses than would be lost if aluminium smelters were forced to pay a fair price for electricity.
Solar power is expensive and usually not viable without an incentive, yet if Eskom is granted a 15 percent increase for the next five years, it’ll be a cheaper option than buying it from the municipality.