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Farmer pays heavily for levies

Jul 01 2012 12:00 Francois Williams

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Cape Town – Certain Eskom customers in rural areas pay more for a range of levies than for electricity consumed it appears from the electricity account of a Swartland farmer.

It shows that 62% of the monthly amount that the Swartland farmer has to pay Eskom consists of levies. Only 38% of his account is for the actual electricity that he consumes.

The R1 560 (excluding VAT) account consists of a service levy of R429.30 (at R14.31 a day), a network levy of R524.10 (at R17.47 a day), the environmental levy of 2c per kilowatt hour, and the cost of the actual electricity that his household used in the month in question.

The individual, who did not want his name mentioned, says he lives just 4km outside town. He has asked Eskom about a prepaid electricity meter, but the utility’s local office is apparently not interested.

According to Eskom’s tariff book the service levy is a fixed amount per account to cover any service-related costs.

The network levy is intended to cover costs (capital operations, maintenance and renovations) related to the provision of a network for delivering electricity to the client. The environmental levy is paid for electricity from non-renewable sources. More than 80% of Eskom’s electricity comes from non-renewable sources. This levy will be increased to 3.5c/kWh next month.

Agri SA senior economist Danie Maree says many farmers living close to towns receive municipal electricity and he finds it strange that the specific farmer has to pay the high network levy, but it might relate to his distance from the closest substation. Rising electricity prices have a particular impact on irrigation farmers.

He admits that agriculture is partly subsidised by large electricity consumers and it is complaining from a position of relative advantage. Agriculture’s electricity demand is a mere 5% of the national total.

Nevertheless, electricity costs previously comprised less than 10% of irrigation farmers’ total input costs and currently amount to more than 20%.

 - Sake24

For more business news in Afrikaans, go to Sake24.com.

eskom  |  electricity


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