Eskom’s money problems could threaten the economy

Eskom has requested cost recoveries of R66.6 billion for the financial years 2015, 2016, and 2017.

According to a report in the City Press, the City of Cape Town and Cosatu have both spoken out against Eskom’s application, stating it would lead to increased power prices and would be unaffordable for the local economy.

In its submission to the National Energy Regulator of SA (Nersa), Cosatu said Eskom’s accrued debt of about R360 billion poses a real threat to the survival of the nation.

“We are very angry at the leadership of Eskom over the past five, 10 years,” said Cosatu.

“Not just at Eskom, but the former president, former minister of energy, their friends, the Guptas have really done a disservice to the nation.”

Cosatu said Eskom’s application should be rejected entirely to protect the economy.

During a hearing regarding the application, the regulator enquired as to why Eskom did not reduce expenses in line with reduced sales, and instead saw its expenses continue to rise.

“We understand there are implications in terms of the economy, and regulatory rules have allowed for Nersa to take into account the phasing in of the liquidation of the regulatory clearing account, so we are not expecting a one-off adjustment,” said Eskom.

Coal supply

Eskom is also facing problems with its coal supply, relying on diesel generators to supply power in the absence of coal delivered to the company.

According to reports, the worsening situation led Eskom’s head of generation to recommend that a coal supply emergency be declared.

Diesel is expensive to burn, and Eskom has reportedly spent R306 million on fuel for its turbines since December 2017.

Eskom is burning more diesel than planned to make up for the reduction in power capacity caused by power station breakdowns.

Now read: Eskom forced to burn more diesel due to plant failures

Latest news

Partner Content

Show comments

Recommended

Share this article
Eskom’s money problems could threaten the economy