{"id":827781,"date":"2025-06-11T14:49:20","date_gmt":"2025-06-11T12:49:20","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=827781"},"modified":"2025-06-11T14:49:39","modified_gmt":"2025-06-11T12:49:39","slug":"eskoms-r30-billion-punishment-for-paying-customers","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/energy\/827781\/eskoms-r30-billion-punishment-for-paying-customers\/","title":{"rendered":"Eskom’s R30 billion ‘punishment’ for paying customers"},"content":{"rendered":"\n

Power utility Eskom wanted paying customers to cover R30 billion of its arrears debt, while writing off billions from energy users who refuse to pay.<\/p>\n\n\n\n

This was blocked by the energy regulator Nersa in the latest MYPD6 application for the next three years.<\/p>\n\n\n\n

Nersa has published its full documentation of reasons for its decisions to allow Eskom to hike electricity prices by 12.7% for 2025 and by 5.36% in 2026 and 6.19% in 2027.<\/p>\n\n\n\n

While the regulator granted Eskom above-inflation increases to its tariffs, it was far less than what the power utility wanted. <\/p>\n\n\n\n

Its original application was for a 36.15% hike in 2025, followed by 11.91% in 2026 and 9.1% in 2027.<\/p>\n\n\n\n

As part of its deliberations and decision-making process, Nersa looks at every factor of the applied-for increase and decides which amounts to allow and which to reject.<\/p>\n\n\n\n

A notable rejection for the MYPD6 was Nersa’s disallowance of any revenue to be collected by Eskom to address its arrears debt.<\/p>\n\n\n\n

For the period, Eskom wanted to saddle its paying customers with an additional R30 billion of charges, which would have factored into the final approved increase, to address arrears debt.<\/p>\n\n\n\n

The utility wanted to recover R8.9 billion in 2025, R9.9 billion in 2026 and R10.8 billion in 2027.<\/p>\n\n\n\n

This would have had the effect of anyone paying their bills diligently covering Eskom’s losses from failing to collect from non-paying customers.<\/p>\n\n\n\n

Nersa said that it would not be fair for paying customers to be charged with higher electricity prices and to carry the burden of those who are not paying.<\/p>\n\n\n\n

This would be particularly egregious, given Eskom’s abject failure to stick to its previous collection commitments to Nersa.<\/p>\n\n\n\n

Nersa said that it disallowed arrear debt to be included in the MYPD5 period as well, for similar reasons.<\/p>\n\n\n\n

In the past, the regulator had adopted a 0.5% allowance as a provision for arrears debt. In direct terms, this means Nersa expected Eskom to have a 99.95% revenue collection rate, which is considered reasonable.<\/p>\n\n\n\n

However, Eskom failed to collect 99.95% as per the provisions. In fact, Eskom’s debt collection levels have only deteriorated.<\/p>\n\n\n\n

In its latest application, Eskom indicated that its projected payment level for 2025 is only 95%, and is expected to deteriorate to 91.7% by FY 2028.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Debt write-offs<\/h2>\n\n\n\n

Eskom is currently working with the National Treasury to deal with its mountain of arrears debt, particularly those owed by municipalities.<\/p>\n\n\n\n

While the groups have launched a municipal debt relief programme, Eskom has lamented that it is not proving to be very effective.<\/p>\n\n\n\n

The programme makes provision for municipal debts to be written off, provided they can meet certain requirements. No debt has yet been written off.<\/p>\n\n\n\n

However, Nersa noted that Eskom has been writing off debts for non-municipal customers as well as for Soweto, the latter of which has seen R12 billion of its debts written off since 2015.<\/p>\n\n\n\n

The utility applied for a further R2.8 billion in impairments related to Soweto between 2025 and 2028.<\/p>\n\n\n\n

Eskom identified Soweto as a high credit risk area and has challenges collecting overdue amounts from customers. <\/p>\n\n\n\n

The utility indicated that the initiative to convert post-paid meters to prepaid has assisted with reducing non-payment in Soweto, and this is supported by continued credit management enforcement for those remaining on post-paid.<\/p>\n\n\n\n

Nersa said that none of the stakeholder feedback to Eskom’s MYPD6 application showed any support for allowing the utility to include arrear debt in its recoveries.<\/p>\n\n\n\n

The regulator said that blocking arrear debt from the application would encourage Eskom to be more disciplined in its revenue recovery programmes and develop a more controlled financial environment.<\/p>\n\n\n\n

Most notably, it would also put the utility’s focus on collecting debt from customers who owe it, rather than passing on the burden to paying customers through higher prices.<\/p>\n\n\n\n

\"\"<\/a>
Eskom’s debt write-offs over the last decade<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

Power utility Eskom wanted paying customers to cover R30 billion of its arrears debt, while writing off billions from those who refuse to pay.<\/p>\n","protected":false},"author":10,"featured_media":781237,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9874],"tags":[4771,1164],"class_list":["post-827781","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-debt","tag-eskom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/827781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=827781"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/827781\/revisions"}],"predecessor-version":[{"id":827793,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/827781\/revisions\/827793"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/781237"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=827781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=827781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=827781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}