Electricity is becoming the biggest threat to our income.

Eskom has managed to keep the viel on issues regarding electricity but no one is explaning the real cost.

Here is an extract from a report by Grove Steyn for treasury in 2003:  Eskom and municipal tariff structures should continually be moved closer to cost, including real-time costs, so as to impact on customer behaviour and delay further generation investment and encourage more efficient demand-side adjustments and investments. While costs would be higher at peak times this strategy would limit the increases in average costs over the long term.

Electricity is fastly becoming the new gold in South Africa. As families battle to keep up with the load-shedding schedule, the soaring rate of purchase, and Eskom’s purchase policy that is making life unbearable for many. The problems of Eskom widens, so have their tactics improved on how to raise money to fill the gaps of misappropriated funds.

The loops of wires and hauled cables are the hallmarks of townships, many have found the back door to get it illegally, as the gaps between the have and have-not widens in a country that is grappling to reap the promises of democracy, 26 years on.

Living in an area that hardly experiences load shedding was a dream come true for so many in centurion. The high rates were directly assumed to have been as a result of the ever-constant power and were a reasonable price to pay, but that has recently changed.

Many of the residents in the wider east and west of Tshwane are having a higher pinch after the new tariff was applied. Resident took to social media to share screens of how electricity has become so expensive and unaffordable for even those who assumed they were in the high-income brackets.

” I thought something was wrong with my wiring and had to get an electricity specialist to check for loops, the consumption rates are fast and the Kwh given on prepaid recharges are low. How do we survive in a system as such” says Rooven Smith, a resident of Hennospark.

Is the real issue about the electricity tariffs, or the escalating cost of middle merchants making the cost soar higher. According to Eskom officials, there are special days of buying electricity. This allows users to monitor usage and also affects purchases on a sliding scale. The assumption is that every household must understand their consumption needs and use that pattern to buy.

We have so many day-to-day headaches to battle, why must a simple thing as electricity become such complicated math. We are told to buy once, specifically beginning of the month, in order to fix into the bulk buying plan that makes the units higher.

Prepaid metering was projected as the easy alternative away from fixed metering, a model system that would help us plan how we spend and monitor usage but it is fastly becoming a nightmare. To topple it is the latest law passed in parliament to convert all meters to prepaid, which makes it hard to query purchases and usage.

A complicated set of factors determines end-use electricity prices. Simply put the chain that makes up the final price includes:
1) Eskom’s costs for the generation and transmission of electricity. These include the cost of fuel, labour, services, materials, and property, and the cost of finance (equity and debt).
2) The costs involved in distributing electricity to end consumers and providing retail services (borne either Eskom or municipal distributors)
3) Profits (or losses) in addition to the economic cost of the capital employed in the enterprise. Municipalities typically mark up retail tariffs to make substantial surpluses from their power sales, while Eskom profits from distribution activities are generally lower.

The electricity supply industry (ESI) in South Africa remains organised along the lines of the traditional public monopoly model. Eskom produces 96% of power generated in South Africa, while large municipalities generate 1.3%, and a small number of private power producers generate 3.1%. Eskom also owns and operates the national high voltage transmission grid, which conveys electricity from Eskom power stations to the main load centres across the country. Currently, Eskom holds 55% of the distribution and retail market in terms of energy supplied, while the remaining 45% of its energy is sold to  Municipalities who retail it to other end-users.

In the bid to find an answer to the way to understand the issues and the solution, I am made to believe residents who cannot afford electricity can apply with the municipality under a special program to assist. I would be following up with my ward councillor on the process and would share.

Till we get some answers,  as to why we do not have a clear-cut purchase that is not inclusive of so many middlemen. We are always going to have these issues, and it can only get worse from here as we struggle with low wages, unemployment and many people move down the income scale. I can only hope that this steers up some conversations that can lead to an actual solution.

 


Download Grove Steyn’s Electricity Report to Treasury

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