Eskom is facing major opposition in its bid to attain a 24.78% electricity tariff increase, aimed at “covering vital costs”. The embattled power utility provider is currently involved in a series of public hearings before the National Energy Regulator of SA (nersa), seeking an additional 9.58% increase to an already approved 12.69% price hike. An additional 2.51% tariff increase is also currently on hold.

But the move is facing its fair share of criticism from energy experts, who believe that further hikes will be financially crippling to the everyday South African, as well as business and the local economy as a whole.

One of those to have made submissions to nersa is expert Chris Yelland who was highly critical of the fact that prices were going up in “leaps and bounds”. This was having dire impact on the business and industrial sectors.

“Jobs are being lost in the mining industry, shafts are being closed and various mining operations shut down. Smelting operations, which are heavy users of electricity, are suffering greatly. They literally cannot compete on the world market anymore with the price of electricity having gone up by four times (since 2008),” He declared.

Yelland said Eskom were effectively giving off mixed messages as to the current state of the country’s power supply. On the one hand there was something of a threat that if it did not receive the sought increase, South Africa could be hit even harder by load shedding. On the other hand, the forecast from its acting CEO, Brian Molefe was contrastingly different.

“I went to a presentation by the CEO of Eskom more than two weeks ago in which he presented a cash-flow forecast for the year, on the assumption that they would not get the extra 12.69% they are trying to get. He suggested that they could cope quite well,” he claimed.

Eskom’s bailout plan includes borrowings of up to R55 billion. They are however set to receive a R23 billion from government, after the move was approved in parliament on Wednesday. In addition, government has sought to convert R60 billion sub-ordinated loans to Eskom to equity, which according to Yelland effectively means Eskom need not pay government back.

And he was at the forefront of calls for Eskom to seek alternative solutions to the energy crisis, as opposed to demanding extra funding.

“I listed in my submission to Nersa at the public hearings at least seven or eight other options they should be considering before the use of diesel. But it seems that Eskom just wants the money,” he stated.

During Wednesday’s hearings energy analyst, Ted Blom suggested there was a 50% chance the energy grid could suffer a total collapse, effectively plunging the country into darkness for anywhere between one and two weeks. Eskom has however refuted this, suggesting almost zero possibility that the grid will collapse. VOC (Mubeen Banderker)