California Has Power Problems. You Should See South Africa

(Bloomberg) -- South Africans can empathize with Californians enduring power outages instituted by bankrupt utility PG&E Corp. to prevent strong winds from knocking down electrical lines and igniting fires.

Africa’s most industrialized nation has been contending with electricity shortages since late 2005, as a result of state-owned utility Eskom Holdings SOC Ltd.’s failure to invest in additional generation capacity as the economy grew.

Almost the entire population of 58.8 million has been affected by intermittent rolling blackouts -- which all too often come without warning -- and the resultant traffic jams and business interruptions that dent the economy. The outages in the U.S. may eventually affect more than 3 million people.

While Eskom, which supplies about 95% of the nation’s power, has managed to keep the lights on since March when there were 10 consecutive days of outages, the utility has warned that the system will remain vulnerable for another two years. The problem is particularly acute during the summer months, when most plant maintenance occurs.

Like PG&E, Eskom is in dire financial straits -- it’s not generating enough cash to pay its bills and is reliant on state bailouts to remain solvent. Most of its power stations are old and been poorly maintained, and two new ones are riddled with defects.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Mike Cohen, Liezel Hill

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