Eskom asks consumers to use less power – then wants to hike prices because it sells less electricity

Eskom continues to ask South African consumers and businesses to use less electricity, but is now using this reduced consumption as a reason for drastically increasing prices.

The power utility often appeals to its customers to reduce their electricity usage, especially during the peak periods from 6:00 to 10:00 and 17:00 to 21:00.

Eskom also has an agreement with large industrial customers where the company can instruct them to reduce electricity consumption when it is urgent to balance the system.

Eskom has previously thanked its customers for their support in using electricity sparingly during the early morning and evening peak periods.

“Every little bit of savings goes a long way in assisting us to manage the demand and supply of electricity and to eliminate the need for load shedding,” Eskom said.

The reduced consumption means that Eskom is selling less electricity. It is using this as a reason to significantly increase electricity prices.

Eskom’s tariff applications include a forecast for electricity sales, which is typically far lower than expected because of the reduced consumption which Eskom is asking for.

This lower forecast means that Eskom is asking for much bigger electricity price increases, which will hurt the pockets of people who reduced their electricity consumption.

Energy analyst and MD at EE Business Intelligence, Chris Yelland, said consumers are essentially punished for doing Eskom a favour.

“I cannot understand how Eskom urges electricity customers to reduce consumption to help it to meet demand, and then asks Nersa for increased electricity prices to compensate for the reduced sales,” Yelland said.

Eskom loses urgent application for big electricity price increases

The North Gauteng High Court has recently dismissed an urgent application from Eskom to claw back R58.5 billion from customers though two big price increases.

Eskom wanted to increase the price of electricity by 16.6% on 1 Apr 2020, and follow that up with a further 16.7% price hike in April 2021.

This is much higher than the National Energy Regulator of South Africa (Nersa)-approved increase of 8.1% in April 2020 and 5.2% for the following year.

While Eskom lost this urgent application, it does not mean that big future prices increases are not on the cards.

It simply means that Eskom will not be able to implement the requested tariff increases at the beginning of April 2020.

Judge Jody Kollapen highlighted that while he dismissed the request as not urgent, the merits of Eskom’s case will be heard in Part B of the review process.

Now read: Cosatu’s plan to use South Africans’ pension money to fund Eskom – Here is the solution

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Eskom asks consumers to use less power – then wants to hike prices because it sells less electricity