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Eskom's special pricing agreements (SPA) is of great concern to the Democratic Alliance (DA) and in a meeting with Nersa on 12 March 2010, the DA asked for clarification regarding these SPA's.

Nersa's response confirmed that it had access to the information contained in the SPAs and takes into consideration the sales volumes and costs thereof when calculating the revenue allowed to Eskom in order to ensure alignment and cost reflectivity on the SPA's.

However nowhere in Eskom's tarrif increase application to Nersa, was there any referance made to the effects of the two Billiton Group contracts, which are in fact closely related to the tariff increases sought by Eskom and granted by Nersa.

The need for the increases is affected by the contracts that Eskom has with the Billiton Group. Eskom should disclose the extent to which these contracts contribute to their existing operating losses.

The tariff increases granted by Nersa will have a significant impact on ordinary South Africans on a daily basis. In these circumstances and on this basis alone, there is a public interest in the contracts between Eskom and Billiton.

Eskom admits that its power prices for industry and mining are considerably cheaper than residential prices and between 1995 and 2005, prices rose more steeply for domestic customers compared to industrial and mining tariffs. The reason being economies of scale. This means that it costs much less to supply one big consumer, than linking up million of homes.

In South Africa the lion's share of electricity is consumed by big industry and commerce to the tune of about 76%.

Suburban residents will pay the earth to subsidise cheaper electricity prices for poor communities, but big industries will pay much less towards the subsidy bill.