|
|
South Africa: ANC to Push Case for Gradual Eskom Hikes
 |
 |
|||||||||
|
||||||||||
|
|
|||||||||
|
||||||||||
Business Day (Johannesburg)
15 May 2008
Posted to the web 15 May 2008
Siseko Njobeni
Johannesburg
SA IS set for more gradual electricity price increases over the next five years rather than the original once-off 53% hike sought by power utility Eskom, if African National Congress (ANC) proposals to a top-level "energy summit" are accepted.
Among the proposals the ruling party will table at tomorrow's summit is a "smoothing mechanism" which aims to lessen the shock of price rises.
ANC secretary-general Gwede Mantashe said this week the party preferred prices to rise at a more consistent rate.
"We say let us agree on a unit price of electricity by a certain period and then work backwards," Mantashe said.
He said such a mechanism would have to be introduced as soon as possible.
The ANC has been one of the strongest critics of Eskom's proposal for a 53% increase in electricity prices. Mantashe said the increase was inappropriate.
"The economy cannot afford that. "
He said the party and government agreed that a smoothing mechanism was needed. Since Eskom applied for the increases, the ANC had met the public e nterprises and m inerals and e nergy ministers. The proposal would be discussed at the summit "so that it can be discussed by other stakeholders for national consensus".
The ANC sought the summit in the wake of the energy crisis and Eskom's request for a tariff hike. The National Economic Development and Labour Council (Nedlac) is the convenor.
Participants include the government, the private sector, labour, community organisations, Eskom, the Reserve Bank, the ANC, the South African Communist Party and the South African Local Government Association (Salga).
Econometrix director Azar Jammine said yesterday, "Everyone agrees that the price of electricity is far too low and that we need to get to a realistic price. I think the smoothing of the price is what needs to happen."
The National Energy Regulator of SA (Nersa) will hold public hearings next Friday to discuss Eskom's request. Last year, Eskom applied for an 18,7% increase and Nersa granted it 14,2%.
"That 18% is close to what we think is the correct increase," Mantashe said.
Jammine, on the other hand, said an annual increase of 26% was acceptable. Such an increase, he said, would double the price of electricity over three years.
Mantashe said the ANC wanted the government, Eskom's only share- holder, to offer more financial support to the utility.
"All costs relating to wrong or delayed decisions must be funded by the state. For example, government did not increase capacity, hoping for the entry of independent power producers. Costs linked to that must be absorbed by the state."
|
He said the government should absorb costs associated with the accelerated demand side management programme. If these costs were taken out, Eskom would need a lower increase.
The state has made a R60bn loan available but no details have been made public on how the money will be transferred to Eskom, or the repayment terms.
Eskom GM for demand side management Andrew Etzinger declined to reveal the status of negotiations yesterday, saying the matter would also be discussed at the summit.
| |||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Copyright © 2008 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Make allAfrica.com your home page | RSS Feed | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Top | Site Guide | Who We Are | Advertising | Search | Subscribe | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Questions or Comments? Contact us. Read our Privacy Statement. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
