The First of 3 Eskom Price Hikes Coming in April
The Energy Regulator has run public consultations and has now given Eskom permission to bump their prices by 9.41% in April 2019.
Eskom Prices to go up by 9.41% in April 2019
We all know that Eskom is in a lot of trouble and their systems need a serious overhaul to even try and keep up with the growing energy demand across SA.
Past political decisions dating all the way back 25 years, by necessity, left the country’s electrical capacity constantly playing catch up. More recent state capture revelations, as well as management issues, have further seen Eskom making poor decision after poor decision. Rolling brownouts and “loadshedding” have seriously impacted on the country’s economy (and investment reputation).
Due to asking consumers to please use less electricity Eskom soon found they were suddenly not invoicing out as much as they were before since people were now using less electricity. The obvious solution that presented itself was to push up the price of what they are now supplying.
Plans are now afoot to split the entity into 3 sections in an effort to try to get things going in the right direction and enable the various sections to be better run and gain funding. It is hoped these plans will see the country’s primary energy source stay above water and keep the lights on across the country.
The Next 2 Hikes
Nersa, has also given the ‘go ahead’ for Eskom to hike prices by another 8.10% in 2020 and 5.83% in 2021. This will mean that by April 2021 customers will be paying an effective 25% more for electricity than in March this year.
‘by April 2021 customers will be paying 25% more for electricity than in March this year’
Eskom has reported that it is currently running at a R500 Million loss each month. Even with as much as a R100 Billion bailout from government planned (from tax payers money) Eskom will still not be able to make up for lost ground due to the incredibly high interest rates and fees on their very big existing debts. Not only do they need to service their existing debt but further invest in expanding capacity.
‘Eskom has reported that it is currently running at a R500 Million a month loss each month’