Michelle Gillie Barnes

OPINION PIECE Eskom, City Power, and NERSA leave South Africans out in the cold By Rein Snoeck Henkemans, Managing Director of Alumo Energy 04 July 2024: Through the combined, complicit actions of the City of Johannesburg, City Power and NERSA, South African consumers are facing a looming, dire cost-of-living crisis. Just when South Africans thought there was light at the end of the tunnel, City Power has pulled the rug out from under them with the stealthily executed introduction of load reduction – otherwise known as loadshedding. Claims that this move was necessary due to increased electricity usage during the winter months seem disingenuous at best. Temperatures have dropped, people are staying indoors more, and they need to keep warm. Consequently, it would appear obvious that electricity usage is bound to increase. This begs the question: how is it possible that, despite their many years of combined experience, neither Eskom nor City Power had made any contingency plans to mitigate higher seasonal demand? Adding insult to injury, City Power proceeded to slap its some 250,000 prepaid customers with a R200 “service fee” - for a service that isn’t being delivered! Even more gallingly, this fee hike was imposed without consultation, and with just one week’s notice, effectively extorting an additional R50 million from hard hit consumers each month. Nice work if you can get it. The justification? The new fee and increased energy cost was the result of a cost and supply analysis conducted during the City of Johannesburg’s most recent Integrated Development Plan workshop. This, after Eskom triumphed in a court decision against City of Joburg for an account that hadn’t been settled since October 2023. Furthermore, this move disproportionately affects lower-income consumers living in areas with failing infrastructure, which amounts to preying on cash-strapped individuals and families who are already struggling to make ends meet. Moreover, this fee hike was approved by the National Energy Regulator of South Africa (NERSA) as an additional cost on top of the steep 12.7% percent tariff increase it had also approved. Adding insult to injury, Eskom is seeking an additional 36% tariff increase for 2025. This means that municipal power customers could see a meteoric 43.5% hike in their already exorbitant electricity costs. Meanwhile, many South African households are being forced to drastically cut back on the basics given persistently high inflation and interest rates. To underscore this point, Alumo recently performed some calculations demonstrating that homeowners could see their electricity bills skyrocket by as much as 60% this winter, thanks to higher winter tariffs, the proposed Eskom electricity tariff hikes for 2024/2025, and the sharp rise in energy usage during the chilly months. A further, more pertinent example is that we examined the electricity costs incurred by an average household in June / July 2023, using an average of 1 000 units per month. These costs amounted to an average monthly bill of approximately R2 400 per month, or R2.46 per unit. In conducting the same the same comparison in July 2024, taking into account the various price increases, the same household, using the same number of units is now facing a monthly bill of R3 000 per month, or R3.00 per unit. Again, for a service that they aren’t receiving. With these sharp price increases and the continued instability of the grid in mind, it’s little wonder so many South Africans are making the move to solar. According to Eskom’s Generation Adequacy Report, rooftop PV output has more than doubled in less than two years – a trend that seems likely to continue. It’s time for accountability. South Africans deserve better than to be left out in the cold by the power plays and antics of Eskom, City Power, and NERSA – entities meant to serve them, but instead marked by incompetence and opportunism. ENDS