The Department of Public Enterprises says Eskom has achieved a saving of R10 billion in costs. This is better that the target of R7.7 billion the entity had set itself.

The department has added that there has also been a reduction in the R35.3 billion debt by municipalities that was recorded at the end of last year, as some defaulting municipalities have started paying up.

The huge debt owed by residents of Soweto remains a concern. However, Director-General in the Department Kgathatso Tlhakudi explained to members of the Public Enterprises Committee how some of the savings were achieved.

“Most of these savings have been realized in the primary energy space as well as improving how the business is run and taking the debt cost out of its operations. There had been a commitment to sell off the Eskom Finance Company which provides financial services to Eskom employees. The sale is expected to be concluded by the end of this financial year and it will help reduce the debt burden on the business.”

Rising municipal debt to Eskom poses a serious risk: Deputy President Mabuza

Eskom presents pricing structure

Last week, Eskom presented its plans to change its electricity pricing structure to the National Energy Regulator of South Africa.

This included moving away from the Incline Block Tariff or IBT. Incline Block Tariffs divide the electricity price into several steps or blocks. The first block of electricity is at the lowest price.

As the customer purchases more electricity during the month, the electricity bought will eventually fall in block two which is a bit more expensive. Not using IBT will mean there will be some cost relief for households consuming more power.

But it will increase some basic costs for those who use less. Tariffs would also be structured according to peak and off-peak times.

Dr Stephen Labson, former consultant to Eskom, shares more: