LISTEN | Eskom's proposed 32.02% price hike must be 'rejected outright', says analyst

Eskom has requested a 32.02% electricity price increase from the National Energy Regulator (Nersa) for the 2024 financial year, effective from April 1 next year.

But independent economic and energy analyst Tshepo Kgadima says the power utility's justification for the increase simply does not hold water.

Listen to what he has to say about the request: 

The key factors Eskom has cited for the hike include:

• depreciation of 10.67%, due mainly to an incorrect regulatory asset base valuation by Nersa in its decision for the 2023 financial year;
• Eskom primary energy of 7.85%, 6.09% of which is due to the increase in diesel and fuel oil prices as well as a volume increase in OCGT fuel; and
• IPP cost increase of 9.05% , due to further energy being sourced from IPPs, including emergency procurement.

Kgadima says while the country stands by Eskom’s need to perform maintenance on its various plants, he does not feel the utility is getting value for money with its maintenance projects. 

He does not foresee an end to load-shedding, which he states is not only dire for SA’s struggling economy but also hinders Eskom’s ability to collect revenue. He suggests an overhaul of Eskom's management and a “mass firing” at the utility.

TimesLIVE

Support independent journalism by subscribing to the Sunday Times. Just R20 for the first month.