(Debate in Parliament: Exorbitant tariff hike recently applied for by Eskom)
Eskom’s recent application to impose a tariff hike of nearly 40% on consumers this year has sparked public outcry.
Its calculation is based on the expected cost of power generation, essential maintenance, and expanding the power grid and generation capacity.
If the power utility’s financial predicament was caused solely by factors outside of its control, the application may have been received better. Consumers have, however, realised that they are bearing the brunt of years of poor management, the misappropriation of funds and even criminality.
Eskom is able to try and foist the predicament on consumers’ because the price of electricity in South Africa is administrated. It means that Eskom applies for a specific tariff while the final decision lies with the regulatory authority, NERSA. This is because Eskom has an absolute monopoly on the electricity market.
Years of load shedding have compelled South African households, businesses and communities to make their own power plans, though. The new reality is that large generation units no longer outdo small-scale, local generation units when it comes to price and even efficiency.
Now that load shedding appears to be at an end, those with their own power generation systems are still saving money.
Besides, small-scale power generation contributes to the bigger picture. Between 11:00 and 15:00, when solar panels generate the most power, Eskom is able to supplement other sources for use during peak times. In addition, the batteries consumers procured to get through load shedding also help to cover peak-time consumption.
As a result, the administrated price of power is increasingly subject to the free market. Consumers now have an alternative if the price of Eskom power no longer suits them.
As with security and infrastructure maintenance, communities could increasingly benefit from joining forces and bolstering power supply from being an individual enterprise to a community initiative.
Frankfort in the Free State and Orania in the Northern Cape are two communities paving the way.
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