How load shedding hikes up your electricity bill

Eskom’s introduction of stage 4 load shedding could have costly repercussions for your electricity bill, says energy expert Ted Blom.

Speaking to Jacaranda, Blom said that when appliances are switched back on after load shedding there is a surge in demand for power.

“You pay a penalty on peak demand. If your peak demand goes up, you pay an extra penalty on your monthly account,” he said.

“Heavy equipment that surges on and off can more than double your monthly account.”

Blom said that consumers are also probably not aware that if power is not available, they will still be paying for power availability – known as a ‘line charge’.

“When power is not available due to load shedding, each person is entitled to a rebate for these charges.”

Blom said that more than half of a person’s electricity charges are for line availability, or line capacity – adding that citizens can’t be paying more, for more unreliable electricity, or for less electricity availability.

“What are we paying for?” he asked.

Alice in Wonderland

Commenting on the recent briefing by Gordhan and the Eskom board about load-shedding, Blom said they have no idea what is going on.

“I call it the Alice in Wonderland meeting. The Department of Public Enterprises and the Eskom board took control a year ago and they are still wondering what is going on,” Blom said to Business Day TV.

“They are now discovering new things, and are putting up pictures of power stations and boilers as if it is the first time they have seen something like that.”

Blom said Gordhan and the Eskom board should be providing South Africans with answers on how they will fix Eskom.

“They have been there for 15 months and had many opportunities to do an audit and turnaround plan. They have even had teams of experts who helped them, but we still do not have answers,” he said.

The expert said that until Eskom figures out its coal procurement plan, it will take five years to remedy the rolling blackouts, and intermittent power cuts.

Electricity increases

At the beginning of March, energy regulator Nersa said that it had granted Eskom the following tariff increases over the next three years:

  • 9.41% or allowed revenue of R206.34 billion for 2019/2020;
  • 8.10% or allowed revenue of R221.8 billion for 2020/2021;
  • 5.83% or allowed revenue of R233.1 billion for 2021/2022.

In determining the hike grant, Nersa said it considered Eskom’s regulatory asset base, weighted average cost of capital, expenditure, IPPs, depreciation, R&D and levies and taxes, among other factors.

The granted hikes equate to a 25.2% increase over the next three years.

The increase is in addition to a 4.41% price increase which had already been granted to Eskom by Nersa as part of its Regulatory Clearing Account (RCA) grant.

Eskom originally asked for a 15% hike in tariffs for the next three years to allow it to boost revenues and to help dig itself out of mounting losses and growing debt.

Read: Police investigating possible load shedding sabotage: report

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How load shedding hikes up your electricity bill