Shock of paying more for less

Deputy President Cyril Ramaphosa

Deputy President Cyril Ramaphosa

Published Jun 29, 2015

Share

Latest figures showed the inflation rate running at 4.6 percent, although any shopper or manager looking at their cash outflow would challenge the rate at which their costs have risen.

Yet despite this, the National Energy Regulator of SA (Nersa) allowed Eskom to raise its prices by 13 percent from April 1, given the gargantuan money-hole that the power utility has descended into. So gargantuan, in fact, that last week Nersa was obliged to revisit the Eskom matter, with the power utility now asking for an increase of about 25 percent this year. Nersa’s decision on this exorbitant request is expected today.

Eskom’s problems are myriad and have been well-ventilated. The offices of its top staff members have been well-ventilated in recent months too, with a slew of top executives leaving. Public Nersa hearings, press conferences and the intervention of a “war room” headed by Deputy President Cyril Ramaphosa have made it clear there are no short-term resolutions to Eskom’s woes, and that the country is in for a prolonged period of load shedding.

However, as Eskom’s power failures drain billions of rand from the economy, just how much more financial pain can be heaped on its customers through punitive price hikes? The power utility has suffered from a loss of income as a result of its rolling blackouts, even while it needs to finance the building of new power stations and pay for the river of diesel used to run emergency turbines.

Some measures it is taking are already bearing fruit, including forcing municipalities to pay for the power they have passed on to their customers. Another hurdle to be overcome is to get residents to cough up where they have long been accustomed to a culture of non-payment and illegal connections.

More efficiencies are needed, and the notion that customers can be fleeced at will must end. Forcing people to pay more for less is an abomination.

Related Topics: