Eskom Crisis: Increasing Tariff Structures
Eskom has implemented a 15% price increase on the cost of electricity in South Africa.
The Eskom tariff increase ranges from R1.58 per unit to R1.82 per unit for the average South African household, meaning the average household will pay 24 cents more per unit (Eskom, 2021).
Making matters worse, the South African public will have to spend more on their electricity and reduce consumption despite not being consulted or included in the price review process (eNCA, 2021).
The electricity price increase will have a ripple effect and direct impact on the cost of transportation, food production, business manufacturing as well as consumer monthly spending patterns (Myburgh, 2021).
The timing of the increase has occurred during the Covid-19 pandemic and during a period of returning load-shedding, over and above the fact that consumers are also experiencing a national fuel price increase.
Furthermore, US based technology company Oracle has also recently threatened to withdraw its services from Eskom due to a dispute with the dire power utility (Lilley, 2021).
Eskom’s price increase is intended to pay off the power utilities existing debt, that amounts to over R470 billion, which is still worsening due to corruption and the failing infrastructure of the traditional grid.
The funding required to address the aging infrastructure will certainly provide additional debt issues for Eskom in the future (Lilley, 2021).
The price increase is planned to recuperate at least R10 billion from consumers pockets, which remains a negligible drop in the ocean and a mere 2% total debt recovery rate (Lilley, 2021).
The above-mentioned events are reason for concern and leaves Eskom in dire need of assistance.
Whilst there is hope for Eskom, at the expense of the public consumer, South Africa and the world are turning their attention to the growing trend of adopting and seeking alternative energy sources (eNCA, 2021).
Recurring blackouts provide the perfect setting to ponder amidst the darkness — why should consumers be paying for Eskom’s debt?
