Eskom’s big coal whopper

2018-12-05 16:02
Eskom. (Felix Dlangamandla, Gallo Images, Netwerk24, file)

Eskom. (Felix Dlangamandla, Gallo Images, Netwerk24, file)

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There is no shortage of coal, as Eskom claims. Instead, the coal is piling up at the mines, uncollected by the utility, Anna Marth Ott, CEO of Middelburg Chamber of Commerce and Industry, said yesterday.

Middelburg is positioned between three large Eskom power stations, and there are 170 coal mines within a 200 km radius of the town.

Speaking to The Witness on Tuesday, she said that Eskom had ceased taking delivery of the coal for reasons unknown to her, for the past month, and that its “wording” to the public about the coal shortage was incorrect.

“How can Eskom tell us there is no coal?” she asked.

Spokespeople for Eskom did not respond to questions from The Witness about the coal supplies by the time of going to print.

Ott is one of many business chamber leaders, including Pietermaritzburg Chamber of Business CEO Melanie Veness, who have met in Johannesburg this week to strategise on how they will oppose, in a united voice, Eskom’s latest tariff proposals.

Veness said when one considers the extent of the tariff increases over the past 10 years, the latest plan for a 15% increase over the next three years is “outrageous”. The current round of load-shedding, just prior to Eskom’s latest tariff increase application, also appeared suspicious given the utility was not taking delivery of its contracted coal volumes, she said.

In Pietermaritzburg, like other cities in the country, the business sector is the main user of electricity.

“You cannot expect business to pick up the cost of corruption,” she said, adding that Eskom had shown no effort so far to recoup the estimated R500 billion it has lost to corruption. In addition, she asked how Eskom could ever hope to become financially sustainable if it remained overstaffed by more than 30 000 people. No attempt had been made by the new Eskom board to reduce the headcount, she said.

Eskom has applied to the National Energy Regulator of South Africa (Nersa) for a 15% increase in electricity tariffs for three years from next year until 2022. Last year Nersa granted Eskom a nominal 5,23% increase, following a 2,2% increase the previous year, which Eskom argued meant that consumers received a below inflation increase for those two years.

The utility claims a “cost reflective tariff” would warrant a 90% increase next year, but due to the “migration towards cost reflectivity, this is not an option that Eskom is considering”.

It also claims that “in the interest of the potential impact on consumers”, it will adopt a “smoothed price path”, which will result in a 15% average price increase for each year. This would also leave a debt commitment shortfall of R50 billion for 2019/20 and 2020/21.

“This is a significant sacrifice being made by Eskom in the interest of allowing the economy to adjust as the migration towards cost reflectivity,” Eskom said in its application.

The Energy Expert Coalition said a full forensic investigation was needed into Eskom, as it was not sustainable financially, and a R50-billion debt repayment shortfall would kill its bond market, where it borrows money.

The EEC said a 15% increase would translate into a 17%-20% increase for municipal customers over three years.“

Read more on:    pietermaritzburg  |  eskom
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