Eskom tariff increase to add millions to stone fruit production costs

An Eskom tariff increase of 9,4% has been approved by Nersa, and could add millions to production costs for stone fruit farmers.

Eskom submitted an application last year to Nersa to recover R22,8 billion from consumers, but was only granted a R11,2 billion variance.

“Eskom has noted Nersa’s decision, which yet again doesn’t address the question of Eskom’s continued financial sustainability. In addition, it will have operational consequences,” said Eskom group chief executive Brian Molefe in a statement.

The increase will have a great impact on the production costs of farmers especially when it comes to irrigation and cold chain costs.
“The 9,4% increase will add about R16,4 million to the production costs of stone fruits,” said Hortgro executive director Anton Rabe.

“The costs when coupled with ‘normal’ inflation of about 6% would amount to about R10,5 million – the higher-than-inflation adjustment will cost the stone fruit industry about R6 million more.”

The increase, coupled with the drought, would mean that producers will have to start looking at alternative energy sources to be able to increase production and lower production costs.

“Maybe Eskom will end up with expensive electricity that no one can afford or is willing to pay for and the need will be taken up through private initiatives,” said Rabe.

The increase will be in effect from 1 April.