1. EIUG Key Stakeholder Engagements
1.1. Meeting with Eskom – 18 August 2017
During engagement with Eskom’s Acting CEO, Mr. Dladla, it was agreed that the EIUG and Eskom’s executive and department specialists would meet regularly and work together to enable increased production and economic growth, through several pricing initiatives. At a meeting between the EIUG Council and Eskom on 18 August, Eskom outlined its sustainability and sales growth strategy:
- Attempt to assist customers and industry in distress to retain its base sales;
- Explore mechanisms that will grow sales and improve under-utilised industry capacity;
- Attempt to expedite projects that are currently underway; investigate ways to bring stabled projects back; and explore what can be done to get projects commissioned sooner; and
- Work with different stakeholders to bring global investors into South Africa.
The Eskom Pricing Team presented on the Strategic Pricing Direction; this has been approved by the Board and will be presented to NERSA through the Department of Energy (DoE) in due course.
The approved interim framework, under which the two current negotiated pricing agreements (NPAs) have been applied for, is currently in place. This is expected to end in two years. The long-term pricing framework should ready for implementation within one year.
The EIUG supports the efforts to move towards a cost-reflective industry tariff.
All parties agreed that this framework could be developed under the current electricity pricing policy (EPP) and the current legislation, the Electricity Regulation Act of 2006 (ERA); therefore, time needn’t be take up redrafting policy or drafting new policy to enable these changes. The EIUG will work with Eskom and other stakeholders to develop this framework.
We will keep members informed of all engagements and progress.
This work will be discussed further at a meeting with Eskom on 1 September 2017. The EIUG will also engage with NERSA on 7 September on enabling structural changes to tariffs under current policy and legislation, with a view to achieving an internationally competitive, cost-reflective industrial tariff, and also understanding their process for Eskom’s pending tariff applications and regulatory clearing account applications (RCAs).
The EIUG was also represented at a BUSA meeting with Eskom’s CEO on 28 August. Issues discussed included Eskom’s pending tariff applications; the financial sustainability of Eskom; and the joint task team on the long-term price trajectory.