City Power asks Eskom to be spared lower stages of load shedding

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City Power recently signed a Power Purchase Agreement with Kelvin coal power station to bolster the capacity of electricity it receives from the plant.
City Power recently signed a Power Purchase Agreement with Kelvin coal power station to bolster the capacity of electricity it receives from the plant.
Dino Lloyd, Gallo Images
  • The City of Johannesburg has recently signed a two-year power purchase agreement with Kelvin coal-fired power station, which it believes can help offset load shedding.
  • City Power, responsible for supplying electricity to Johannesburg residents, this week has officially requested Eskom to exclude it from stage 1 and stage 2 load shedding.
  • The deal with Kelvin is valid for two years and allows for the continued provision of as much as 220 MW of electricity to City Power.

City Power this week officially requested that Eskom exclude it from stage 1 and stage 2 load shedding.

The City of Johannesburg last week signed a two-year Power Purchase Agreement (PPA) with Kelvin coal-fired power station, based in the east of Johannesburg. The existing 20-year agreement will expire in November. The new agreement will see the City acquire additional capacity of 180 MW - up from 80 MW, Fin24 previously reported.

City Power spokesperson Isaac Mangena previously told Fin24 that this additional capacity could help offset load shedding - especially for lower stages 1, 2, 3 and possibly stage 4.

He said that the deal would allow for the continued provision of as much as 220 MW of electricity to City Power.

In a letter dated 11 October, which was circulating on Twitter, City Power Acting CEO Nancy Maluleke notes the new PPA with Kelvin and asks Eskom CEO André De Ruyter to exclude the City from the lower load shedding stages.

"Given that in the past 3 months, KPS (Kelvin Power Station) has demonstrated their commitment to supply uninterrupted power averaging 240 MW to City Power, I therefore request that City Power be excluded from stage 1 and 2 load shedding as City Power has proactively made contingent plans to avert against load shedding to its customers and businesses."

Maluleke added that her office is available to engage further on the matter.

Mangena said that load shedding is going to be a long-term problem, then utilities like City Power should be allowed to enlist their own generation capacity to mitigate against the power cuts.

"Eskom load-shedding, in our view, should not be a long-term problem as the integrated resource plan is meant to ensure long-term security of supply."

Stage 2 load shedding was recently suspended and Eskom CEO André De Ruyter said the power utility is working to ensure no load shedding over the municipal election season.

Distribution takeover

Eskom and City Power have signed a memorandum of understanding based on plans for the City to take over distribution to some parts of Johannesburg, from the power utility. These areas include Soweto, Sandton, Orange Farm, Ivory Park and Diepsloot.

"No transaction has been concluded yet, and in terms of the regulations, all affected stakeholders will be part of the decision-making process," the parties said in a joint statement issued this week.

City Power has to conduct due diligence on Eskom's infrastructure and assets in the affected areas where the power utility holds a distribution licence.

"The due diligence study will consider, among others, the state and value of the infrastructure that would eventually be sold to City Power, the outstanding debt owed by customers to Eskom, and other corporate information that will be material to an eventual agreement," the statement read.

If an agreement is reached between the parties, the transaction will still require regulatory approval and a public participation process for those affected. 

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