Consumers struggling to pay increasing Eskom bills

Published Aug 12, 2015

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Louise flanagan

JOHANNESBURG: Eskom is delivering less electricity at a greater cost, and consumers are struggling even more to pay for it.

This is revealed in Eskom’s integrated annual results report 2015, for the year ended March 31, which the utility released yesterday.

During 2014/15, Eskom sold 216 274 gigawatt hours of electricity, which was less than any of the previous five years.

But Eskom’s operating costs and its charges to consumers have more than doubled since then. Operating costs were 67.52c/kWh (cents per kilowatt hour) for 2014/15, up from 59.7c/kWh in 2013/14 and 28.2c/kWh in 2009/10.

Eskom’s revenue (what customers pay) was 67.91c/kWh for 2014/15, up from 62.8c/kWh in 2013/14 and 31.9c/kWh in 2009/10.

For Eskom, its costs are going up faster than revenue.

“Electricity revenue was barely sufficient to cover our operating costs,” states the report.

The big cost increase is in the price of primary energy (coal, diesel and nuclear fuel), up to R83.425 billion in 2014/15 from R69.812bn the year before and R26.9bn in 2009/10.

But for consumers, these are bills that aren’t being paid.

In December, Eskom recognised revenue only if it was deemed to be collectable at the date of sale, and thus did not recognise R597 million.

“Debt collection from municipalities and small power users, particularly in Soweto, remains a concern. At March 31, 2015, 10 municipalities had total overdue debt greater than R100m each; the top 20 defaulting municipalities contributed approximately 80 percent of the total arrear municipal debt,” said Eskom’s report.

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