Wednesday, October 14, 2009

ESKOM disses South African electricity users

eskomshock ESKOM, as I have written before, is a grossly mismanaged public enterprise, that also has an energy monopoly in South Africa. As a para-statal, and the only energy provider, it could have been mistakenly thought that ESKOM would have the integrity and moral courage to think of the South African electricity user before turning itself into a dung heap of morons that have no inkling of an idea what they are about to do to South Africans and the economy.

Just a few months ago, an electricity price hike of 31% came into effect. Suddenly, now, ESKOM wants to go into overdrive when it comes to price hikes. Can you believe that those nincompoops running that institute of insanity want a price hike of 45% per year for the next three years? What are they trying to achieve? Running South Africa and its citizens financially into the ground? That is exactly what they will achieve! ESKOM is fast becoming a economic black hole.

Let's look at this in actual monetary terms. If a person paid only R100 per month for electricity before the last 31% tariff hike, he will end up paying R399.37 after the three 45% tariff hikes proposed by ESKOM over the next three years. That is almost 300% higher per month! Have a look:


R100 Initial payment
R131 After this year's 31% tariff hike
R189.95 After first 45% hike
R275.43 After second 45% hike
R399.37 After third 45% hike

Let's look at my own usage:
R1200 Average initial payment/month
R1572 After this year's 31% tariff hike
R2279.40 After first 45% hike
R3305.13 After second 45% hike
R479244 After third 45% hike

Ludicrous is not the right word for this. A much stronger and forceful word needs to be used here. The absurdity of such price hikes are quite apparent. ESKOM, it seems to me, is on a clear suicide mission, and it is not even Japanese. By trying to attack South African wallets, they are surely to die a slow painful death as a company. And that will not happen too soon!

Now is the time for South Africans to start looking earnestly for alternatives to ESKOM's monopoly. If ESKOM wants to drive South Africans financially to ruin, it is time to start striking back! If South African households can somehow disconnect ESKOM from their households, then whatever tariff hikes ESKOM comes up with will be meaningless!

If the South African government and/or NERSA give their stamp of approval for these tariff hikes, what are we to conclude? Would it be fair to conclude that they, like ESKOM, have no respect for South African citizens, and that they agree with the total mess that ESKOM's management has caused? Surely, any person of intelligence can see that ESKOM's proposal is in no way, shape or form good for South Africa!

For those who read this blog, if you have done any research on alternatives for household electricity, please leave a comment for the benefit of others. We need to find such viable alternatives soon, before ESKOM drives South African citizens into bankruptcy!

Are you willing to stand against ESKOM? Show it in the comment section!

Update:

Eskom has brought their requested price hike down from 45% per annum to 35% per annum. Therefore, the example figures given above will be different. It works out to be a 322.31% compound price hike!

R100 Initial payment
R131 After this year's 31% tariff hike
R176.85 After first 35% hike
R238.75 After second 35% hike
R322.31 After third 35% hike

Let's look at my own usage:
R1200 Average initial payment/month
R1572 After this year's 31% tariff hike
R2122.20 After first 35% hike
R2864.97 After second 35% hike
R3867.71 After third 35% hike

Update 24 February 2010:

The verdict by NERSA is in. They are giving Eskom a 26% annual price hike staggered price hike for the next 3 years (2010 - 24.8%; 2011 - 25.8%; 2012 - 25.9%). That makes it a 259.94% increase from the initial price for electricity, and a 197.66% increase over the next 3 years. That means, after the next 3 years South Africa's electricity prices will have doubled! This is happening while some large companies and foreign countries that buy electricity from us are getting preferential prices. South Africans will end up suffering while foreign companies and countries reap the benefits. That is injustice!

R100 Initial payment
R131 After this year's 31% tariff hike
R163.49 After first 24.8% hike
R205.67 After second 25.8% hike
R258.94 After third 25.9% hike

Let's look at my own usage:
R1200 Average initial payment/month
R1572 After this year's 31% tariff hike
R1961.86 After first 24.8% hike
R2468.01 After second 25.8% hike
R3107.23 After third 25.9% hike

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