Eskom wants tariff increase to recover load shedding losses
Eskom has applied to the National Energy Regulator (Nersa) for a tariff increase, to recover R27 billion in losses from load shedding.
Energy expert Ted Blom said that this tariff increase will see electricity costs increase by up to 17% and is a reflection of the power utility’s continuous mismanagement.
“Nersa has called for the public to comment before 20 Jan as part of the decision-making process, after which they will assess Eskom’s application,” said Blom.
“If we allow Eskom to succeed, we will see a substantial jump on current tariffs. However, as the increase is over and above their annual tariff hikes, in reality, your electricity costs will double within two years.”
Stakeholders have until 20 January 2020 to submit written responses to Eskom’s applications.
Cost of load shedding
An analysis by economists at the Efficient Group shows that load shedding has already had a big impact on the local economy.
The group’s ‘cost of load shedding model’ considers GDP from the supply side and uses assumptions about the ability of an industry to mitigate the cost of downtime, said the Efficient Group’s Francois Stofberg.
Stofberg said that the group’s model further assumes an average downtime of seven hours a day – which is equivalent to something between stage 3 and 4 on a consistent basis.
“Using these assumptions, we find that the cost of load shedding has reduced our GDP growth by roughly 0.30% in 2019. This translates to R8.5 billion of real, inflation-adjusted rands,” he said.
“This value is much less than some estimates going around, but these estimates usually do not adjust for the ability of consumers and producers to change their trade-habits and therefore, often overstate the impact of load shedding.”
Load shedding continues
Eskom said Friday that it will implement Stage 2 rotational load shedding – for the ninth straight day as its generation plants continue to perform at low levels of reliability.
“Load shedding will be required all day to cater for further trips and to create capacity to replenish water reserves for our pumped storage schemes. Eskom will communicate if there is a change in the system,” said the power utility.
Eskom said any unexpected shift such as an increase in unplanned breakdowns could result in a change in the load shedding stage at short notice.
It said it will provide a prognosis for the upcoming long-weekend later in the day.
“We continue to ask customers to reduce demand as a concerted collective effort can help to avoid or lessen the level of load shedding.
“As we are experiencing rainy and cooler weather conditions in some parts of the country, we ask that you use efficient heating to keep warm and switch off your geysers over peak periods,” it said.
Read: How much money Eskom load shedding has wiped off the economy
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