Eskom tries to claw back costs, and Energy Users are not having it

The Energy Intensive Users Group (EIUG) believe the overruns were caused by factors that were within Eskom’s control.

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“Eskom’s poor strategic choices cannot forever be made a burden for consumers,” Fanele Mondi, Chief Executive of EIUG, told the regulator in response to the utility’s claim.

Members of EIUG include Anglo American and Glencore, and account for about 40% of the nation’s electricity consumption.

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The failure by Eskom to meet electricity demand has resulted in record nationwide blackouts that occur nearly every day and that are taking a massive toll on the economy. The loss-making national power utility is in equally dire financial shape and has relied on government bailouts in order to magage its debt.

Eskom can apply to the National Energy Regulator (Nersa) of South Africa to claw back unforeseen expenses through its so-called regulatory clearing account.

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That process includes public hearings followed by a decision from Nersa that indicates how much can be recovered through a tariff increase.

Of the R23.8 billion that Eskom is applying to recover from the 2022 financial year, no more than R1.1 billion should be granted, Mondi stated.

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“Eskom seems to believe that its operational performance is due entirely to external forces, such as delayed government decisions, Nersa not granting its requests, the Russia-Ukraine conflict and lower electricity consumption,” he added.

“Poor performance is the significant contributing factor to lower consumption and sales.”

Meanwhile, South Africa’s economic hub, Johannesburg, recently secured 92 megawatts from four independent power producers (IPPs.)

This is through a short-term power purchase agreement (STPPP) in an effort to shield the city from nationwide electricity shortages.

This is part of City Power’s 10-point plan to lessen the impact of load-shedding by generating 500 MW of energy by 2030. 

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