SA can't shoulder Eskom burden
29/05/2008 12:09  - (SA)  

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Pretoria - The National Energy Regulator of SA (Nersa) should use its power and tell Eskom that it will not be granted a further increase this year, the SA Small and Medium Enterprise Forum said on Thursday.

At the last day of hearings in Pretoria on Eskom's proposed 53% tariff increase, the regulator heard that poor planning by Eskom was no justification to punish the consumer.

Tebogo Khaas of the SMME Forum said the hike would destabilise the small and medium enterprises industry which contributed 35% of the country's gross domestic product.

He suggested the increase be capped at the 14.2% already approved and that future increases be limited to CPIX.

The theme that Eskom and government should pay for their lack of planning also ran through other submissions made on Thursday.

Finance officers for the country's biggest cities questioned Eskom's ability to plan and forecast effectively.

Kris Kumar of the Chief Financial Officers Forum for Metros said the regulator had to carry out an independent risk assessment to develop a functional and efficient risk management strategy for the power utility.

He questioned how Eskom could - within a matter of months after being granted an increase - return to the regulator to ask for a further substantial tariff hike, saying this indicated a lack of planning.

"We recommend an oversight committee be established to review Eskom's entire financial profile, funding requirements as well as credit rating."

Kumar repeated the warning of earlier submissions saying a 53% increase would cause "major disruptions" in local government's ability to deliver services.

"We recommend that if (Eskom had) additional requirements, if justifiable, the increase be phased in at not more than two to three percent above CPI.

"Eskom must obtain loans to make up the shortfall on its capital expansion programme," he said.

Sandile Maphumulo of eThekwini Municipality had the same concerns as Kumar, saying Eskom's return to the regulator indicated incompetent or very poor planning and forecasting.

He said there was still a lack of transparency from Eskom and it made it difficult to comment on its requests.

Maphumulo said that if Nersa approved Eskom's 53% tariff increase Durban residents would see a 32% rise in their tariffs.

He also said it could only be implemented for July 1 rather than the proposed implementation of April.

The National Consumer Forum said electricity prices should be more equally applied to all users and that residential users be excluded from further increases.

(Residential) customers must stop subsidising neighbouring states, industry and mines, said Lillibeth Moolman of the NCF.

She said it was government's responsibility to provide electricity in a affordable and sustainable manner.

Moolman suggested that one of the steps that could be taken was for Eskom to be run as a pure utility, operating in a cost basis only.

Phillip von Wielligh, of TAU SA, said government should pick up the tab for Eskom's expansion - saying the economy could not afford it at the moment.

"It is not for Eskom to bully the users," he said.

The recent power cuts could have been avoided if Eskom had listened to earlier suggestions.

Von Wielligh said the government should drop its import tax on generators, saying the tax for those imports were 34%.

- Sapa /lo/ks

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