Energy group opposes Eskom's proposed tariff hike
The EIUG is warning the hike will make it difficult for businesses to compete internationally.
JOHANNESBURG - The Energy Intensive User Group is warning a second double digit increase for electricity proposed this year would make it difficult for South African businesses to compete internationally.
The industry body says power prices in South Africa have risen 70 percent since 2010.
Eskom raised tariffs by just over 12 percent in April and has applied for an additional 12,7 percent hike for July.
The group, which represents major companies in South Africa including Anglogold Ashanti and BHP Billiton, is opposing the price rises.
It will make its submission to energy regulator Nersa ahead of public hearings on the proposed tariff hikes next week.
Meanwhile, after two months in the Eskom acting CEO hot seat, Brian Molefe, says the utility has performed 'much better than expected' over the past few months, despite regular load shedding.
He says last month accounted for the majority of rolling blackouts.
"The worst period was in May when stage one load shedding was implemented from 5pm to 10pm in the evenings."
MOLEFE HAILS ESKOM'S WAR ROOM USEFUL
Meanwhile, Molefe says the war room, which was established late last year, has been extremely useful in terms of addressing the utility's problems.
Deputy President Cyril Ramaphosa is heading the war room and was asked to do so by Cabinet to deal with the electricity crisis and financial issues facing Eskom.
Molefe, who was appointed to head Eskom just two months ago, says the plan for winter was discussed in the war room.
"It's in considering the recommendations that have been made by people in the war room that we can now articulate a strategy that will take us through winter."
During Eskom's Quarterly State of the System Report at its headquarters in Johannesburg, Molefe also assured that there's no prospect of a blackout in South Africa.
'HIGHER TARIFFS WILL MEAN LESS LOAD SHEDDING'
At the same time, Eskom's acting CEO says higher electricity tariffs will mean less load shedding for South Africans and avoid further damage to the economy.
He says Eskom has applied for additional money to buy diesel which keeps generators running when the power grid is constrained.
Molefe says their application for an electricity price increase is justified because Eskom needs to buy more diesel.
Diesel is used to operate generators which are used during periods when the system is vulnerable - in order to keep the lights on.
Molefe says they just don't have adequate funds.
He says without diesel supplies, load shedding will be implemented and this costs the economy far more than what they're asking for.
MOLEFE CONFIDENT IN WINTER PLAN
The acting CEO says he believes their winter plan of ramping up maintenance work and avoiding load shedding is possible.
He added that electricity consumption is expected to increase as this winter is expected to be colder than last year.
Molefe says up to 5,500 megawatts will be taken off the grid for planned maintenance this winter three times more than previous winters.
However he says their goal is to completely avoid or have minimal load shedding.
"Keeping the lights on and doing maintenance appear to be contradictory but I think it's possible."
Molefe says every effort is being made to reduce plant breakdowns even though this has often been the reason for plunging South Africa into darkness.
The month of May has been the period where the most load shedding has occurred this year.
The power utility has implemented stage one load shedding from 5:30pm until 10pm this evening.