Eskom Is Charging South Africans More for Power Than Bulk Users

Editor: Is this really wrong? After all, one expects to get better prices if you buy in bulk. Maybe the writer should rather have railed against the Inclined Block Tariffs that result in higher prices per unit the more you consume?

Dear Editor

The Democratic Alliance (DA) expresses grave concern over the systemic lack of transparency surrounding negotiated pricing agreements (NPAs) between Eskom, the National Energy Regulator of South Africa (NERSA), and intensive energy users, because a recent report to Parliament shows that only 82.7% of Eskom customers are billed full price, but these 82.7% make up 91.5% of Eskom’s revenue.

Large industrial users consume vast amounts of electricity at preferential rates, while South Africans in their homes and businesses face every-increasing electricity tariffs and relentless load-shedding.

Despite repeated calls for transparency, Eskom continues to conceal the critical details of its agreements to charge intensive energy users and neighbouring countries a much lower tariff than South African homes and businesses.

Eskom’s failure to disclose the revenue generated from these agreements raises questions about whether these deals truly benefit the economy or merely serve the interests of a few at the expense of the public.

In a presentation by Eskom to Parliament’s Portfolio Committee on Electricity and Energy this week, it was revealed that 17.27% of Eskom’s electricity consumed is billed either through negotiated pricing agreements or international sales. What is shocking is that this 17.27% only generates 8.5% of Eskom’s revenue from the sale of electricity.

It appears that tariff increases on these negotiated pricing agreements are significantly lower than the increases NERSA grants on Eskom’s standard tariffs which we are forced to pay in homes and businesses across South Africa.

The details of the increases to negotiated price agreements are being kept hidden by Eskom, and until they are disclosed the true disjuncture and unfairness to home and business consumers will not be completely known.

The ruling in the 2011 De Lange and Another v Eskom Holdings court case underscored Eskom’s obligation to make this information public, yet the power utility continues to hide the real costs of these agreements.

The DA demands that Eskom and NERSA immediately provide full disclosure on the following:

• The details of the NPAs, including names of beneficiaries and pricing structures
• The amount of electricity consumed by intensive energy users
• The revenue generated from these deals
• The increases applied to the tariff in each of these deals

This is not merely a matter of financial transparency, but a fundamental issue of economic justice. Eskom cannot continue to hide behind a veil of administrative opacity while ordinary South Africans shoulder an increasingly unsustainable electricity pricing burden, in the face of increasing loadshedding.

The DA will continue to fight for transparency and accountability in the energy sector, to ensure that South Africans are not unfairly burdened by secret deals that benefit only a privileged few.

Regards

Kevin Mileham MP
DA Spokesperson on Electricity and Energy