Dear Eskom, don’t load shed Western Cape municipalities with paid-up accounts!
18 September 2022
Eskom’s almost incalculable financial problems demand that the utility should collect debtors’ accounts promptly on all of its reduced output. Instead of providing reduced output across its entire market, including non-paying and delinquent customers, Eskom should sell all of its reduced output to customers with the best, and soonest, payment record.
When failing generation produces inadequate capacity for the market, output should be sold where payment is guaranteed, and not wasted on customers with arrears accounts and bad payment records. In short: if a business fails to produce at full capacity to satisfy its market, also because customers do not pay promptly, available output should be sold to paying customers to mitigate loss.
I have written Eskom Group Chief Executive André de Ruyter on September 13, to propose that Eskom load sheds only arrear municipalities, and protects its revenue streams in paid-up municipalities. I suggest that it is imprudent, and unsound business practice to deliver product to delinquent consumers at the expense of delivery to paying consumers.
Eskom forfeits revenue of some R21-million per day per stage of load shedding. Although electricity demand is relatively low on Sundays, stage 6 on Sunday, 18 September, potentially cost Eskom R126-million! Good business practice compels the utility to maintain its delivery where its revenue is most stable – in municipalities where the Eskom account is current – in order to maximise sales, and revenue. With some R400-billion debt Eskom cannot afford revenue losses in addition to the cost of load shedding.