City Power’s huge shedding loss
CITY Power has recorded a whopping quarter of a billion rand loss since the beginning of the year due to load shedding.
The latest bout of rolling blackouts brings to 90 the number of days of load shedding this year, and the power utility says the frequent bouts of load shedding have seen them suffer massive losses.
“From our desktop study we realise that we are losing about R3.6 million a day due to load shedding, and we are expecting the number to go higher due to extensive high levels of load shedding stages this year, coupled with vandalism,” said City Power spokesperson Isaac Mangena.
“Every time there is load shedding, the lifespan of our infrastructure goes down, with wear-and-tear increasing.”
Mangena said opportunistic theft and vandalism of the infrastructure during the downtime had also affected them greatly.
“Most of our daily losses are driven by labour costs, which include overtime, whereby we are forced to call back
all teams, some from leave, to execute load shedding (as well as) the loss of equipment, which includes theft and vandalism, and aged equipment failing or blowing up on restoration, which we are forced to replace.
“We also suffer the loss of potential profit due to the downtime as we do not collect revenue or sell electricity when lights are off during load shedding.
“This affects the annual financial and infrastructure investment projections. The cost of load shedding is even higher if one includes the losses suffered by our customers, especially businesses, most of whom are trying to recover from Covid-19,” he said.
Mangena said that City Power is now finalising plans to get alternative energy through independent power producers.
“This will help alleviate some of the pressures brought by load shedding currently,” he said.
Meanwhile, Eskom CEO André de Ruyter recently reportedly said one solution to the energy crisis would be to reduce electricity demand by increasing prices.
“Our electricity is still too cheap. Something that is cheap gets wasted; something that is expensive gets treasured,” he is quoted as saying.
De Ruyter said the utility’s proposed 32% electricity tariff increase for 2023 was “a mechanical exercise”.
“We don’t sit and suck up this very daunting number of a 32% increase. This is the extent to which we’ve pushed this can down the road, and we are now at a point that, when you plug in the numbers, that’s what you get,” he said.
Eskom submitted its tariff increase application to the National Energy Regulator of South Africa last month.