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DA: Statement by Pieter van Dalen, Democratic Alliance Shadow Deputy Minister of Public Enterprises, on Eskom (04/03/2010)

4th March 2010


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A senior Eskom official before the portfolio committee on Public Enterprises yesterday revealed that the top 138 energy users, which consume between 60% and 70% of electricity generated by Eskom, only pay between 6c and 9c per kilowatt hour. Importantly, the top 10 users will not be affected by the increase in electrify tariffs. Even worse, we understand that some of the tariffs changed to these high-end users have remained unchanged since before 1994. While it is the case that the largest users of electricity should derive some benefit from bulk-consumption, it is also highly problematic that it seems as if these users have not had a change to their electricity costs as the rest of the country have had to experience. It is simply unfair and senseless to keep the electricity costs of the big users constant (and actually deflationary in real terms) when small and medium sized businesses and ordinary consumers are receiving the bulk of the burden.

The solution is fairly simple: the current agreements made between Eskom and the big users needs to be made available to public scrutiny. If it is indeed the case that no significant adjustments have been made, then it is obvious that the big users would have to face the same kind of adjustments as those by smaller companies and the residential user. If this is done, then the burden on smaller users would obviously be significantly less.

This course of action is not intended to discipline big users of electricity or the electricity intensive industrial sector. Far from it, it is merely to ensure that there is an equal amount of competition in the market. It is also important to incentivise efficient electricity consumption by all users -- if the tariffs are not amended for the big users, then their behavior will obviously not change. Small to medium sized enterprises face the risk of having to close down due to the escalating electricity costs, so it is only sensible that the larger users shave off some of their benefits in order for the entire economy to run optimally. That is only what a open, fair, democratic society demands. The burden needs to be spread fairly.

The DA has posed parliamentary questions in this regard and will follow up on the information within the parliamentary committee.



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