Costs, prices and efficiency. In the Dark.

I’ve blogged before that it’s more the cost of electricity and the efficiency of its generation that we should be concerned about rather than the price we ultimately pay. From a national perspective, we pay generation and transmission costs regardless of what the price on our bill is. The profit or loss comes out of our taxes after all.

Today there’s an interesting story that Joburg City Power marks up Eskom prices by 117% when calculating charges for their customers. Well, again, if City Power makes a profit it should in theory be reflected in lower other costs for Citizens.

It does make me wonder though, is this mark-up needed? If so, what is driving the additional costs? Inefficiencies, fraud, non-payment by some come to mind. So it’s still true that we should be looking critically at costs rather than superficially at prices charged.