Weekend blackouts to hit SA

The energy regulator's blunt refusal to grant Eskom a tariff increase will hit South Africans hard, especially at weekends. The National Energy Regulator of SA rejected Eskom's application for a cost recovery of R32.9-billion for open gas turbines and R19.9-billion for its short-term power purchase programme.

A mass of objections to the application, ranging from that it would result in job losses to the environmental costs of Eskom power generation, were raised during the public hearing.

Nersa chairman Jacob Modise said the decision not to grant the increase was also informed by Eskom's failure to provide a plan for implementation of such an increase.

"The application did not provide the mechanisms on how the proposed increase, if granted, can be implemented in the current financial year in a manner that is consistent with the requirements of the Municipal Financial Management Act."

But, according to the power utility, the refusal of the increase means it will not be able to afford diesel to power generators so that other power stations can be taken off-line for maintenance.

"And we are not about to go the Greece route and break PFMA [Public Finance Management Act] regulations and borrow money we have no means to pay back," said Eskom spokesman Khulu Phasiwe.

That means only one thing - weekend load-shedding will be intensified.

Phasiwe said if there was no diesel, weekend load-shedding was a strong possibility. "At the moment weekends are not considered 'peak periods', but if there is no extra power then load-shedding can occur."

He said it was too early to say what the implications of the Nersa decision would be.

"It is back to the drawing board. We will go through Nersa's recommendations and chart a new way forward. "The available options are either to resubmit our application for the increased tariffs, based on Nersa's recommendations, or start a new tariff process."

Phasiwe said though Eskom would not "blackmail" the country, the hard fact was that it needed the money to buy diesel for its generators, which produced 2000MW.

"If there are no guarantees on where we can get the money for the diesel we cannot buy it [diesel].

The tariffs were requested also so that Eskom could have money to buy power from independent energy producers.

"Currently we have enough money to do both as our financial year started only on April 1, but that could run out before the end of the financial year. Last year, the diesel budget ran out four months before the end of the financial year.

"We currently run our diesel generators beyond the three hours they are meant to operate. In some cases we operate these generators for up to 10 hours, meaning that we require more money for more diesel."

Phasiwe said: "We are doing everything in our power to avoid load-shedding, particularly stage three. We load-shed only to stop total blackouts."

The SA Local Government Association welcomed the Nersa decision. "Eskom's application was met with overwhelming opposition by almost all industry players and Salga wishes to commend the regulator for acting in the public interest by rejecting it," spokesman Sivuyile Mbambato said.

- Graeme Hosken and Kingdom Mabuza