There’s cheeky and then there’s cheeky. Eskom, South Africa’s ailing state power generator, is asking the country’s energy regulator for another increase. The National Energy Regulator of South Africa (NERSA) is being hit up for a 33.66% price increase, according to reports.
Additionally, if Nersa gives Eskom what it wants, the utility will then ask for a further 10% increase. Because, as we all know, the major obstacle to keeping the country’s power on is money.
Funding Eskom
The last time our country’s wonderful electricity provider asked for more cash, it was an increase of 20.5%. NERSA gave it 9.61%. Even another discounted increase, below the incredible 33.66% Eskom is asking for, will hit South Africa hard.
The country is reeling following massive fuel price increases, an extended bout of the worst load shedding seen in years, and prices increasing across the board. Increased fuel costs force standard goods and services, like taxi fares, up in price. The impact is visible at all levels of South African society. SA’s poorest are among the hardest hit.
Economist Elize Kruger, speaking to BusinessTech, said “Households are already under tremendous pressure due to higher food and fuel prices, a high tax burden and rising interest rates. An increase of this nature will squeeze households more and lead to less disposable income, thus pushing economic growth further downwards.”
“Consumer confidence and business confidence are dwindling among all the negative developments, of which load shedding’s at the forefront. Now, much more will have to be paid for power that’s currently not even available to the economy for many hours a day.”
There’s a plan afoot to get Eskom to add capacity to the grid in a hurry. At the moment, though, we’re not sure what that plan is. There is talk of a “second Eskom” being established in SA. Because the one we have is doing such a great job at the moment.
Source: City Press