Price of electricity in South Africa should be lower than 50c per kWh

The price of electricity should not be higher than 50c per kWh, and unless Eskom makes this happen, they are in for a fight.

This is according to Ted Blom, OUTA’s Portfolio Director of Energy, who was speaking on BusinessDay TV.

The National Energy Regulator (NERSA) recently received an application for large electricity price hikes from Eskom, which also requested to keep certain cost information secret.

NERSA dismissed Eskom’s request, instructing the utility to provide the cost information by the end of August.

OUTA welcomed NERSA’s ruling, saying it is a significant development toward ensuring transparency regarding the pricing of electricity.

“Eskom is reluctant to display this information in detail, as it will show how inefficiently the organisation has been managed and how exorbitant its operating costs have become,” said OUTA.

Blom said NERSA has been treating Eskom with kid gloves over the past decade, and it has been behaving like a bully.

What the price should be

Blom argued that if Eskom was run efficiently, the electricity price would not be the current 86c per kWh.

“We have found that Eskom has overcharged us, and collected funds, by more than a trillion rand which it should not be sitting on,” said Blom.

Blom said OUTA will not allow another price increase until the playing field has been levelled – when the price of electricity drops below 50c per kWh.

“This better happen within the next five years, otherwise we will just keep on tightening the noose.”

Blom said if you cut away all the fat at Eskom, you get the potential for it to generate electricity at 32c per kWh.

“If that is what it costs Eskom to generate electricity, where is all the other money going to?” said Blom.

Fat cats, corruption, and theft was the answer, he added.

Now read: Eskom executives must be investigated for corruption – Treasury

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Price of electricity in South Africa should be lower than 50c per kWh