Eskom Wants to Hike Tariffs by 32% to Solve Its Debt Problem, Says CFO – Mzansi Outraged by Proposal

• Eskom’s Chief Financial Officer Calib Cassim made the power utility's case for the tariff hike to the National Energy Regulator of SA (Nersa)
• Cassim said that even if Eskom’s debt of R400 billion is relieved, it would still need to increase tariffs
• The power utility is asking for a 32% increase for the 2023/24 period - it was granted a hike of 9.61% this year after asking for 20.5%

JOHANNESBURG - Eskom’s Chief Financial Officer Calib Cassim painted a grim picture of the power utility’s debt.

He was speaking at the first hearing of Eskom’s tariff proposal to the National Energy Regulator of SA (Nersa) on Monday, 19 September.

Cassim said that even if Eskom’s debt of R400 billion is relieved, it would still need to increase tariffs, cut costs, and get users to pay their bills, or it will be struggling. The power utility is asking for a 32% increase for the 2023/24 period.

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According to News24, it costs Eskom more to produce electricity than it can bill consumers; therefore it is nearly impossible for it to get out of debt. However, Treasury may assist the power utility by relieving it of about R200 billion.

The CFO said if debt relief is only conducted without addressing cost-reflective tariffs, Eskom would be back in debt in just a few years, News24 reported. He said the increase is due to a large escalation in Eskom’s cost assumptions.

BusinessTech reported the last increase granted to Eskom was 9.61%. However, the power utility applied for a 20.5% increase.

South Africans outraged by the proposal:

@Execz900 said:

“Fifteen years of mismanagement, looting, stealing, corruption, Theft! You pass this 32% NERSA and you will make South Africans angry beyond reason! It is going to end badly! And you will be the reason if you approve this 32%! It’s going to be the spark that is going to ignite.”

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@MarcSouthon wrote:

“The role of an SOE like Eskom is to provide affordable energy to the country to stimulate growth, Eskom is doing the opp. They must get 0% as more than a ceiling has been reached already. The public is not a debt bailout agency they must cut costs from within starting with executives.”

@Carlos1Delima added:

“Are these people sick?? They can’t even supply consistently but you want a 32% increase!! Where do you think the public will find the money for this ludicrous increase? Wake up!”

Opposition parties drag President Cyril Ramaphosa over on-going loadshedding at Eskom, says he has failed

In a related matter, Briefly News also reported Opposition political parties have broken their silence on the country’s electricity woes and President Cyril Ramaphosa’s lack of leadership surrounding the matter.

The criticisms came after Ramaphosa shared that he cut his international trip short to deal with the energy crisis.

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Deputy President of the Economic Freedom Fighters (EFF) Floyd Shivambu said the president previously performed the same “gimmick” but failed to make any noteworthy changes.

Source: Briefly News