Free State Agriculture, a body representing commercial farmers in the province, plans to oppose Eskom’s proposal to the National Energy Regulator of South Africa (Nersa) to change how electricity bills are calculated.
Currently, 30% of the bill is based on fixed costs – costs that don’t change – and 70% is based on how much electricity you actually use. However, according to Eskom CFO Calib Cassim, they want to change this so that 70% of the bill is based on fixed costs and only 30% on usage.
Francois Wilken, the president of Free State Agriculture, said these drastic price increases on fixed costs and perhaps even carbon taxes, will force power consumers in the agricultural sector to go completely off the grid and that market will be totally lost to Eskom
“Farmers are already paying huge costs when it comes to fixed costs, this while the supply of electricity has often been in the news for the wrong reasons in the last few years,” said Wilken.
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Farmers already pay more for power
Wilken further mentions that farmers already have enormous expenses in terms of input costs like helping to fix roads.
“These are all expenses for which they are not compensated and yet they still put food on the country’s tables.
“The latest attempt to squeeze more money out of consumers is nothing but blatant eye candy. This is not going to help the struggling institution out of the financial predicament it finds itself in despite a recent government bailout.”
Furthermore, extensive livestock farms already pay proportionally more in fixed costs than their actual power costs, FSA said.
They are also concerned because agricultural processing and value-addition plants have cold rooms to keep fresh produce and meat fresh. Also, heating systems for intensive production and climate-controlled system farms need a reliable and affordable power source to provide healthy food to the consumer.
Free State Agriculture said they will oppose Eskom’s application to Nersa as soon as it opens for public input.
“The large cost implications that this will have on especially smaller and intensive farms and processing plants who are direct customers of Eskom will have to be prevented,” Wilken said.
In the meantime, Eskom has managed to keep South Africa’s power on for more than 70 consecutive days with load shedding suspended until further notice due to further incremental improvement in the reliability of the generation fleet.
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