Eskom, South Africa’s embattled power utility, says that it is entitled to an electricity tariff increase of 90% to recoup severe financial losses.

Despite recently being granted a tariff increase of 4% by the National Energy Regulator of South Africa (Nersa), Eskom says it will need to increase the cost to the consumer at least tenfold in order to reach a sales overestimate of R118 billion.

Eskom eyes exorbitant electricity tariff increases

Energy analyst Ted Blom, of eeco.co.za, explains that the initial increase tabled by Eskom relates to a backdated claim for a shortfall of R21.6 billion for the last financial year. In a separate claim, Eskom maintains that it is entitled to a 90% increase, but, in order to spare the average South African consumer, it will settle for less.

Instead of the 90% increase which it says is due; Eskom has instead resolved to increase electricity tariffs by 15% annually. Blom has argued that the methodology used to determine these figures is flawed, which points to the greater concern of corruptive maladministration and nepotism within Eskom. Blom explained:

“This stubborn behaviour by Eskom proves it is still captured albeit now by another third force outside the Guptas. We will be rallying the public to put a halt to all these corrupt increases. The regulations are clear – only an efficient utility qualifies for increases, not a corrupt entity bloated with 35 000 excess staff who sit and do nothing day after day at massive salaries, four times higher than Global averages.”

Price of electricity could be cut by 50% if…

Blom also maintains that if Eskom manages to trim its ballooning workforce and root out deeply entrenched corruption, South Africans could be paying 50% less for electricity.

The energy analyst also warns that if Eskom is allowed to continue on its current trajectory, the power utility will inevitably collapse, both financially and operationally, leading to a complete meltdown of the power grid.

The approved electricity tariff increase of at least 4% is expected to come into effect in April 2019.