Eskom has asked the National Energy Regulator of South Africa (Nersa) for a 15% tariff increase per year for a 3-year period.

This is in addition to a 4.41% price increase which has already been granted to Eskom by Nersa.

Eskom general manager for regulation, Hasha Tlhotlhalemaje, said this big increase should be seen in context of very low increases over the past two years.

She said this latest increase is necessary to ensure Eskom is put on a sustainable path.

Tlhotlhalemaje told eNCA that residential customers have historically received a lower increase than other customers.

This, Tlhotlhalemaje said, is likely to continue as Nersa has not deviated from this strategy in the past.

Customers paying for a huge employee bill

One of the reasons for Eskom’s dire financial situation is its huge salary bill, which has grown significantly in recent years.

Outa chairperson Wayne Duvenage highlighted that Eskom’s headcount was 32,224 in 2006 when its energy output was 222 Terawatt hours.

Although Eskom’s output dropped to 220 Terawatt hours, the power utility increased its headcount to 47,658.

“This in itself equates to around 15,000 too many heads. If it is able to reduce its headcount over time to the prior productivity levels, then Eskom could save around R10 billion per annum at today’s salary costs,” Duvenage said.

Tlhotlhalemaje agreed that this is a topic of debate, adding that Eskom will be moving to a “more efficient employee base”.

She said while the company may not currently be running as efficiently as possible, a tariff increase is still needed to ensure its sustainability.