From 1st April South Africans will be paying 9.4% more for electricity, but Eskom has said the increase does little to assist the utility.
The National Energy Regulator of South Africa ruled this afernoon that Eskom would be granted a tariff hike of 9.4%. Eskom had applied for an increase of 8% after it was granted a hike of 8.6% toward the end of last year.
The utility applied for an additional increase to off-set costs incurred while running open-cycle gas turbines and lower than expected sales figures. You read that correctly, because South Africans used less electricity the utility has struggled to keep its balance sheet in the black.
The increase Eskom applied for would have made up for the shortfall.
Eskom Group Chief Executive, Brian Molefe said in a statement issued this afternoon saying, “Eskom has noted Nersa’s decision, which yet again doesn’t address the question of Eskom’s continued financial sustainability. In addition, it will have operational consequences.”
What would these consequences be? Well for one we would have to reactivate the notification you used to see here on htxt.africa that load shedding is on the go.
That’s right, because Eskom will not be able to off-set the costs incurred for the purchase of diesel which is used to run open-cycle gas turbines we could face a return to load shedding
Of course the reason we have had little to no load shedding since August/September 2015 is because Eskom embarked on a maintenance festival, the results of which speak for themselves.
During this time Eskom used open-cycle gas turbines to offset demand. However, as the price of diesel increases and the utility no longer has a way to offset the costs incurred while running these generators, we could see load shedding return.
“The recovery of diesel costs is now seriously in question with NERSA’s current decision. We will do our best to minimize the risk of load shedding,” said Molefe adding that Eskom would try its best to balance this cost with an ever shrinking balance sheet.
There is no denying that Eskom is in trouble, but since there’s been no load shedding since Molefe officially took over as Eskom CEO in Septemeber, we’re going to give him a bit of our trust, at least until the lights go off.
[Source – Eskom] [Image – CC BY/2.0 Paul Cross]