The Energy Intensive User Group (EIUG) notes Eskom’s intention to approach the courts to have NERSA’s tariff set aside.  EIUG represents very large energy intensive consumers in South Africa whose members collectively consume approximately 40% of South Africa’s electricity.  The organisation works towards a sustainable energy sector on behalf of its members.

Xolani Mbanga, EIUG CEO says, “We cannot comment on the merit of Eskom’s application as we have not yet seen the details.  What does concern us is that this action increases the uncertainty around the electricity price and negatively impacts large power users.”

He adds, “While we acknowledge that the environment in which we all operate has changed significantly and has potentially rendered the regulatory framework used by NERSA outdated, we need South African industries to remain internationally competitive.  And this cannot happen if large electricity price increases are awarded to Eskom.”

Mbanga notes that major price increases will reduce demand, suppress Eskom’s sales and exacerbate the utility’s financial situation.

NERSA applies regulations as laid out by the Department of Energy, which are now being challenged by this Eskom application.  EIUG hopes that the DOE will use this opportunity to review its approach.  Says Mbanga, “The way forward towards a sustainable electricity sector, is to plan for and agree the details of a “just transition”, and not to increase the price of electricity to levels where price increases and demand destruction feed on each other in a disruptive downward spiral. We will be following the situation closely.”