GEORGE NEWS - While residents are reeling from the recent price increases from Eskom, farmers are facing extra challenges.
"The price increases have a negative impact on the agricultural sector and the economy," explained Operations Manager of Agri Eastern Cape, Brent McNamara.
One local farmer who is at his wits' end is Garth Featherstone. "My service charges are astronomical, but if I miss a payment, I am cut off," he explained, adding that every time there is an increase, he has to lay off workers.
Affecting farmers in particular are the many additional service charges levied on rural consumers by Eskom, not paid by those in towns.
Amongst other justifications for the latest increases, Eskom claimed in November 2018 that large branch networks have to be built to serve the farms.
McNamara dismissed this, explaining that in most places, the Rural Branch Electricity Grid was built many years ago and costs for this have already been recovered from the consumers. It is accepted that maintenance is needed, and must be paid for, but McNamara contends that in this area, "Eskom's performance is dismal, despite charging rural consumers exorbitant service and administration, network capacity, network demand and ancillary service charges."
When the rural network was developed in the 1980s, consumers were encouraged to establish as many points as possible, to increase the feasibility of the network. This approach is now costing rural electricity consumers dearly, as each point incurs extra service costs.
The second point of contention is that any increase awarded by the National Energy Regulator of South Africa is applied uniformly across all its charges, for service as well as consumption.
"The result is that for most commercial farmers the combined network charges will soon equal, if not exceed, consumption charges," said McNamara. A farmer's only option to reduce electricity costs is to decrease consumption; however, as the service charges are fixed, the effective price per kWh used will increase if consumption is decreased.
"Increase on service charges must be limited to the real cost plus an acceptable margin for the cost of maintaining the Rural Branch Line Network," said McNamara.
Eskom failed to reply in time for print.
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