SA under-priced electricitym says Eskom chairman

[rpm]

SA under-priced electricity (http://mybroadband.co.za/news/Business/9941.html)

Eskom chairman says South Africa had deliberately under-priced electricity in the past

[OhGats]

Ooooooooh... then why not hike it till its the most expensive in the world? I would think having cheap electricity was something to be proud of! Just remember eskom, the more you hike it the fewer people can afford it and the more you have to hike it to pay for your fancy cars and bonus. Its called a vicious circle.
Then, when there is no economy and we are all using candles then you can ask why. Methinks eskom will kill the economy long before crime and corruption does.

[BradDC]

SA Business mentality, screw your client over now, because tomorrow they may be broke from someone else screwing them over.

Eskom, instead of hiking your price... how about you start innovating on how to make cheaper energy?

[sox63]

IMHO, the cheap electricity party has been over for a while. And though my head agrees with Mr Godsell, my wallet is not looking forward to the increases.

We need to enable Eskom to make enough money to be able to build powerstations, and at the same time make tarrifs attractive enough for Independent producers to want to set up shop and make money.

I think we as this countries citizens have been spoiled with state produced electricity, which has been void of market forces. Fortunately, albeit painfully, that is changing. :(

[Tns]

that bobby is bad news. start taxing people like and hear them squeal

[kkza]

So they want to hike the price, and when the people who are paying for electricity can no longer afford it, do they plan on giving it to us for free like they are currently doing with certain sectors?

[fighthall]

The reason it was cheap was because the government subsidized it. Which resulted in having an equal balance and thus allowing them fat cats to draw 1 million rand bonuses.

During that time they didnt increase the number of plants, or make the current more efficient they just ran what they had, no growth. Now that demand equals supply they have to get off their lazy asses and do something, and to do that means finding money to do so, which makes us suffer the blow from their lack of planning.

[Pitbull]

I honestly don't understand how some of these CEOs operate tbh.

Listen Mr CEO:

Pricing on goods are done to cater for your market. Things to take into account is:
. Production cost
. Target market
. Operation costs

Just to mention a few.

Now let’s take that into account:
. You pay next to FK all for the coal that you buy as it is earthed locally other countries pay top dollar for their resources.
. Your target market is not as rich as the majority of the rest of the world.
. Your operating costs is covered by more than what your income is, you are actually making a profit if I recall correctly.

Your current problem was self created and you are trying to use international standards to justify your lack of foresight?

I think you need to go return those degrees you have hanging over your desk, because it looks to me like you didn't learn shyt when you got them.

There is a pretty simple solution to this mess. Open up the market for competition, I'm sure there are 100's of international power companies who will be able to set up shop in SA and would love to get their resources at a fraction of what they are paying for internationally and they would run these companies with foresight and planning to make sure that they grow with demand and they will still be cheaper.

Stop asking for free handouts you lazy bastard. Do some work for a change....

[Nod]

Government should provide major incentives (subsidies) to people that install alternative energy (solar, wind, etc) systems, instead of giving money to the black hole known as Eskom. Let Eskom fight for every cent.

[Mila]

What lx was saying Squeeeeeeze squeeeeze squeeeze. But we all pay not just the people he wanted to pay.

They will in the end not be able to dish out the free electricity.

[Valinor]

Question, how much are companies paying for their electricity (Especially companies like Alusaf)?
How much are we charging other countries for electricity that they receive from us?Considering that private households account for 10% (perhaps) of total electricity consumption, how much an effect will increasing our electricity really have?
How does one justify 26% increase in a salary to a CEO who's company is running at a 9+Billion loss and while we're at it, how does one justify ANY bonus to a company that is a monopoly?
How does one justify increasing tariffs while saying you need to increase FREE electricity?

But still, relative to other countries, how much do our big businesses pay?

[Devill]

SA under-priced electricity (http://mybroadband.co.za/news/Business/9941.html)

Eskom chairman says South Africa had deliberately under-priced electricity in the past

:erm: Well I can think of a couple of other problems. Like paying the CEO Millions in performance bonusses etc etc for doing a piss poor job.

[Pilgrim]

43% for 3 years is a boatload:

Start at 100.00:
Year 1: 143.00
Year 2: 204.49
Year 3: 292.42

So, we are looking at a 192.42% increase in price 3 years from now.

Ouch!

[davemc]

This is the SASOL formulae allover again.

[McT]

I am one of the many who bleat about the price hikes gone and on the table for discussion. It hurts and it's going to hurt some more. So I am extremely concerned about what the ultimate direct cost to my pocket will be as well as the indirect costs which get passed on through our products and services I consume.

Also I was wondering how they justify all these increases. The average Joe on the street has no clue why they're paying extra and where it's all going to (other than those fat salaries, luxury cars, beach holiday homes ... etc).

If I am paying R 500 p/m now and you increase my electricity bill be 15% each year, by the 5th year I will be paying +/- R 1,000 p/m ... and that's 100% more than when the cycle first began.

But we all know that the increases implemented have been more than 15% and that proposed/leaked is substantially more (said to be 60%? :eek:). And we all know that our salaries are not going to be hiked in like manner. So where do we find the money to pay for all these prices hikes, Mr Godsell?

Nobody is talking about or looking for alternative cheaper forms of electricity.

Apart from solar water heating (and it's still an expensive outlay), nobody is talking about other ways to reduce our dependency on electricity or how to become more efficient.

Eish! :(

So I am having to plan to install solar water heating for my home in Feb/Mar 2010 and hope that it's not going to hurt my pocket to severely in the short term.

[davemc]

As electricity had been cheap, South Africans had used it very wastefully, he noted.

"But there's lots of things you can do -- get a solar geyser, use gas for cooking, change your lifestyle -- these are things you can do to mitigate the tariff increase, Godsell said.So, if we use less electricity to match our current expendature, how the hell are you going to raise the money you need?

Lies!

[arcanum7]

Why not look at some innovative income streams, eg broadband over electricity lines (and maybe iptv). Just a pity that telkom has substantially the same "shareholder".

[RoosTa]

Eskom, instead of hiking your price... how about you start innovating on how to make cheaper energy?The first innovation they can start with, is cutting the fat-cat bonus'. :D

[TelkomUseless]

LOL @ These Eskom oaks. I can't believe how fcking retarted these people are.

So SA was a popular destination for investment. Cheap labour, cheap electricity etc. The cheap labour is out the door long time ago with all the strikes. (Less jobs, less tax).

Now they want to take away another pro for us, electricity. So how competitive are we now against other countries? fckal.

So less job again , less tax etc.

The best part is we must compare ourselfs to 1st world countries when we talk about internet etc. But when we compare electricity prices, then America etc is fine to be compared to ..

Don't worry.. we all will live by candle light in the near future.

[tjunyat]

As electricity had been cheap, South Africans had used it very wastefully, he noted.

"But there's lots of things you can do -- get a solar geyser, use gas for cooking, change your lifestyle -- these are things you can do to mitigate the tariff increase, Godsell said.

The issue with the above is that they already used this excuse and then said that demand had gone down (due to people using solar geysers, gas, changing their lifestyle etc) so now they have to hike the prices again. This cycle isn't productive or conducive to a permanent plan.

. On top of all of this, how many millions in SA are stealing electricity?
. How many millions aren't paying taxes?
. Why are we still selling electricity at a loss/the cheapest price possible to other countries?
. Why are businesses (which make profit from their use of electricity) paying so little for it, consuming so much of it, and the consumer getting screwed?
. Why is SA still investigating pebble bed reactors when the rest of the world has said it's not going to work?
. Why isn't SA investigating renewable sources of energy like wind power, solar power, and wave power? And I'm not talking about the odd consumer, I'm talking about the provider, i.e. Eishkom?

Two final points are:
1. WTF are the Eishkom bosses still getting paid exorbitant salaries when they're clearly not doing their job?
and
2. Where are the penalties for the previous lack of foresight and just blatant screwing of SA by reaping ridiculous amounts of profit for the guavamunt coffers, and now screwing SA more because Eishkom didn't enhance their power plants or grids to deliver with demand that they knew was coming?

[etwylite]

Anybody willing to compare consumption?

I have an average 3 bed home with pool in Suburban Joburg and get my electricity directly from Eskom.

I have installed a solar geyser, cook on gas, and swopped the majority of my light bulbs to CFL or LED..(security lights are metal halide..nothing over 70w)
About as much as the average joe can accomplish from an efficiency point of view.

Only my wife and I at home and we average approximately 475kwh a month.

Anyone willing to provide comparison.

[Saman]

So the average household currently consuming R700-R800 electricity p/m at current pricing can expect to pay R2100-R2400 p/m for electricity 3 yrs from now? :eek:
Ok, time to buy shares in Eskom !! :D ...that, or relocate to Iran - they should have their Nuclear power stations sorted out by then :p

[Singularity1]

So, if we use less electricity to match our current expendature, how the hell are you going to raise the money you need?

Lies!

Well if we use less then Eskom has to build less power stations.

[Zebatshu]

Eskom is the first company who discourage people to buy their product, and then when they aren't making enough money they just increase the price, WD idiots. Eskom needs competition in this sector.

[kevinswan007]

so if electricity prices were too low in the past, then was eskom making a loss previously?

[Big Kriss]

A few years back , about 3 or so, Wits University developed an extremely cheap and efficient solar panel type of product. It was really dirt cheap to manufacture and was seriously efficient and powerful.
It was offered to gubbermint and turned down. It was then sold to a German consortium and is a great success in Europe.

Need I say more ...

[Nick333]

Are we supposed to have forgotten the gross mismanagement of the power grid and generating capacity of the last 10 or 15 years? Are we supposed to forget that Eskom is a parastatal?

The reason Eskoms overheads are so high is because they haven't kept up with upkeep and expansion which should have been paid for out of electricity fees and presumably government subsidies i.e our taxes.

Are we supposed to feel guilty for enjoying cheap electricity? Should we accept our penance and accept that a basic service will now be a luxury because of mismanagement and governments indifference?

The truth is that those who foot the bills in this country effectively have no say in these matters, so yes, we probably will just have to shut up and accept another screwing.

I just wish Eskom would STFU and do what they have to do and stop trying to convince us that, we, the consumers should feel responsible for their fcck ups.

[krycor]

. Why are we still selling electricity at a loss/the cheapest price possible to other countries?
. Why are businesses (which make profit from their use of electricity) paying so little for it, consuming so much of it, and the consumer getting screwed?

That's what sucks, they say they doing it so the consumers benefit by improved investment in dev by companies, jobs etc but in the end companies in Sa are just out to screw everyone and so the civilian population basically subsidising costs by taxes and heavier energy tariffs model doesn't work! Its goes with the cost of goods of everthing in Sa.. its reachinga point where there is going to have to be a massive correction

[DigitalSoldier]

So am I correct in thinking that its better to move to another country in Africa ?

In other SADC countries electricity will be cheaper even though its exported by Eskom, in other countries in Africa bandwidth is cheaper so it will actually be viable to work from home, and most African countries will be able to benefit from skilled individuals and be glad to accept them.

[krycor]

Namibia seems like a good option, been thinking about it. population density is a whole lot less and close enough to have south africanisms..(beside fact that it was taken at one stage)

[Tns]

Anybody willing to compare consumption?
I have an average 3 bed home with pool in Suburban Joburg and get my electricity directly from Eskom.
I have installed a solar geyser, cook on gas, and swopped the majority of my light bulbs to CFL or LED..(security lights are metal halide..nothing over 70w)
About as much as the average joe can accomplish from an efficiency point of view.
Only my wife and I at home and we average approximately 475kwh a month.
Anyone willing to provide comparison.

Two people living in a duplex all lights are energy saving types, gas stove and on average using R560 400units, no idea how many kwh that would be.