Pricing scrutinised as Eskom and eThekwini stakeholders meet

2013-08-21 00:00

ETHEKWINI speaker Logie Naidoo believes there should be less expensive electricity tariffs for people who live in informal communities, given that large industrial power users, such as smelters, benefit from lower prices.

“More than 410 000 people live in informal settlements in eThekwini and we have taken a decision to provide all of them with electricity. It will be prepaid,” Naidoo said at a recent meeting between Eskom and its key stakeholders in the province, including suppliers and municipalities.

Eskom customer services manager Pool Mahadeo said, however, that the special price deals, such as that with BHP Billiton’s aluminium smelters in Richards Bay, were signed at a time when South Africa was oversupplied with electricity and with hindsight, the agreements should have included clauses that allowed Eskom to review the terms. Mahadeo said the electricity price increases for Eskom’s prepaid customers had been less than for other users, and “the less you consume, the less you pay”.

Eskom KZN GM of operations, Sifiso Mazibuko, said that although KwaZulu-Natal’s economy is the second biggest of the provinces in SA and is bigger than those of 45 African states, “we know that we have huge backlogs” in the provision of electricity in the region.

“We want to increase the resources. We have already done a lot of operational work,” he said.

Eskom CEO Brian Dames said the utility had a good year to March 31, 2013, in KwaZulu-Natal, and it has “kept the lights on” with no load shedding, even though it has been a tough year operationally. For instance, Eskom kept power going even after four of the five main transmission lines to the province went down during heavy snowfall last year. Power cuts in the past year in KZN were due to transmission network problems or issues at municipalities, said Dames.

Mazibuko said a big problem in KwaZulu-Natal is syndicates that attack Eskom facilities in search of copper wire. He said Eskom spent R1,6 billion on growing its transmission network in KwaZulu-Natal in the past year. The para­statal’s total capital expenditure was R60,1 billion in the year.

Eskom chairperson Zola Tsotsi said that delays are a normal feature of power station build programmes.

Interesting electricity price stats

• Eskom sells electricity to its main clients at 58c per kilowatt.

• It costs Eskom 54c per kilowatt to generate the electricity.

• The price of Eskom’s main input cost, coal, is 28c per kilowatt.

• Eskom pays private electricity producers 83,6c per kilowatt.

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