Eskom has asked the National Energy Regulator of South Africa (Nersa) for a 15% tariff increase per year for a 3-year period. Hashaba Tlhotlhalemaje, Eskom General Manager for Regulation reasoned that as they did not receive the increases they requested in recent years it is owed the proposed increase.
MCCI again urges Eskom to assess their operations and remove overhead items that are driving up the cost of electricity. The change in Eskom’s output of 222 Terawatt hours with a headcount of 32,224 in 2006 to 220 Terawatt hours with a recent headcount of 47,658 is quoted regularly.
Another cost factor that is seemingly ignored, is the quality of coal Eskom purchases and how it impacts production. Reports of poor quality coal and how it affects electricity output surface sporadically. The idea that Eskom pays for rocks instead of coal does not make any business sense. What does the coal contracts stipulate and why does Eskom accept an inferior product? Eskom management should go back to the cost-plus model that has worked for decades; there is enough coal, it is the suppliers that are not managed.
Business wants to see a concerted effort from Eskom to weed out poor operational practices, bring back checks and balances to ensure quality control of the coal purchased and go back to the cost-plus model that worked for many years. As a country, we cannot afford an Electricity Power Generator that does not focus on customers’ requirements, but instead on their suppliers’ requirements.