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City Power has incurred a direct financial loss of over R58 million as a result of the recent loadshedding.

This financial impact was experienced by City Power between 16th October 2019 and 5th January 2020 due to the intermittent load shedding during that period.

During this time, Eskom made at least 16 Loadshedding declarations as the power utility struggled with generation and other capacity constraints. The declarations ranged from Stage 1 with the highest so far being Stage 6 in December.

As the municipal utility receiving our electricity from Eskom, we are obliged to help the national Power utility to save certain amount of electricity in order to avoid a total shutdown of the system.

It is during this time of loadshedding where City Power infrastructure not only takes a serious knock, but we also lose a lot of money.

City Power loses were felt mostly in three potential areas, which are staff overtime, as we are forced to avail technicians and operators after normal working hours to ensure restorations are done after loadshedding. Due to our aging infrastructure, we have seen an increase in areas taking long to restore due to insurge currents and explosions.

Another area of loses is the equipment which either failed during restorations, or the transformers or mini substations that exploded during insurgents of current.

The other is the loss of potential profit which we would have made if we were selling electricity to customers. But because of loadshedding, people are not consuming which means loss of revenue.

These loses do not include billions of Rands lost by business's lack of activity across the City of Johannesburg during loadshedding.

The breakdown of loses are as follows:

* Equipment failures – R14m  * Potential lost profit –R43,6m

* Overtime – R 1,2m

The Total cost resulting from load shedding in the past 4 months amounts to R 58,8m.

"We have said this before that the cost of Loadshedding is huge for us at City Power. We decided on the desktop snapshot of what it means so that we can inform our strategy going forward especially in an event whereby loadshedding stays with us in future, so that we can plan accordingly to maximise on other opportunities including

Load limiting through the smart meters, ripple relays, and increasing generating capacity at Kelvin power station, so that we cushion our customers against the impact of loadshedding. Plans are already underway to engage Eskom in this regard on some of these alternatives available for us," said City Power CEO Lerato Setshedi.

The effects of load shedding accelerate 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 impact is still felt even now long after loadshedding was temporarily suspended.

Issued by City Power