Paying customers must reject higher electricity tariffs

ESKOM’S intended court action to get higher tariff increases approved is a slap in the face for its paying customers.

The embattled power utility goes to the High Court next week to have the National Energy Regulator of South Africa’s tariff decisions reviewed and set aside.

Eskom is arguing that Nersa shortchanged it by at least R100 billion, and wants the court to enable it to get at least R69bn from consumers.

Eskom wanted increases of 17.1% for 2019/20, 15.4% for 2020/21 and 15.5% for 2021/22.

However, Nersa approved increases of 9.41%, 8.1% and 5.2% for the next three financial years, which Eskom says leaves it with a shortfall of R102bn.

Eskom says it has not paid performance bonuses in two years, an acknowledgement of the company’s dismal performance.

But now it wants the consumer to pick up the tab for poor management and maladministration.

Forced to institute load shedding – brought on by maintenance issues – Eskom’s sales dropped.

The cost of running diesel turbines to reduce the length of load shedding added to municipalities that don’t pay their electricity bills compounds its woes.

What is Eskom’s solution to the predicament? It plans to saddle paying customers with the bill for its incompetence and the cost incurred by those who refuse to pay.

The message Eskom is sending out is that people and municipalities can continue using electricity and not paying for it because the paying customers will pick up the tab.

Paying customers might swallow the higher tariffs if Eskom took steps to address some of the thorny issues. These include collecting outstanding arrears from Soweto – said to amount to about R18bn – and municipalities that have not been paid for their services for several years.

Eskom also has to reduce its staff bill; either by reducing staff numbers or reducing or freezing salaries at the top.

Coal supply contracts should be renegotiated, especially with those mines linked to inflated prices for a poor quality product, and households with alternative generation arrangements should be allowed to push excess power back into the grid.

The paying consumer can only be milked for so much.