Recent load-shedding cost Joburg's City Power R58m

The spate of load-shedding in the past few months has cost City Power close to R60m, it said.
The spate of load-shedding in the past few months has cost City Power close to R60m, it said.
Image: John Liebenberg

Johannesburg's City Power said on Thursday it had incurred a direct financial loss of more than R58m as a result of load-shedding over the past three months.

City Power spokesperson Isaac Mangena said the financial effect was felt between October 16 2019 and January 5 2020 and was caused by intermittent power cuts.

During that time Eskom made at least 16 load-shedding declarations as the power utility struggled with capacity constraints. The declarations ranged from stage 1 and went right up to stage 6, in December.

Mangena said as the municipal utility receiving electricity from Eskom, City Power was obliged to help Eskom save a certain amount of electricity to avoid a total shutdown of the system.

He said it was during this period of load-shedding that City Power infrastructure took a serious knock, but the municipal entity also lost a lot of money.

The financial knock was felt in three key areas. The first was for staff overtime, as technicians and staff worked after hours to ensure the power supply was restored after load-shedding.

“Due to our ageing infrastructure, we have seen an increase in areas taking long to restore due to insurge of current and explosions.”

Mangena said another area of losses involved equipment which either failed when power was restored, or transformers or mini-substations that exploded during current surges.

He said there was also the loss of potential profit which City Power would have made, had it been able to sell electricity to customers.

“But because of load-shedding, people are not consuming, which means loss of revenue. These losses do not include billions of rands lost by businesses' lack of activity across Johannesburg during load-shedding,” said Mangena.

City Power said the breakdown of losses were as follows:

• Equipment failures – R14m

• Potential lost profit – R43.6m

• Overtime – R 1.2m

City Power CEO Lerato Setshedi said the cost of load-shedding was huge. 

“We decided on the desktop snapshot of what it means so that we can inform our strategy going forward, especially in an event whereby load-shedding stays with us in future.”

This would enable City Power to “plan accordingly to maximise on other opportunities, including load limiting through smart meters, ripple relays and increasing generating capacity at Kelvin power station, so that we cushion our customers against the affect of load-shedding”, said Setshedi.

He said plans were already in motion to engage Eskom on some of these alternatives available for City Power.

Setshedi added that the effects of load-shedding accelerated the ageing of City Power  infrastructure.

“Our system, which was never meant to be switched on and off at quick intervals, took a serious knock during load-shedding and the affect is still felt even now, long after load-shedding was temporarily suspended,” Setshedi said.


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