Eskom to squeeze consumers more

Eskom CEO Tshediso Matona says government needs to take "tough political decisions" that will enable the power utility to get the cash it needs to keep going.

There are many options, including listing Eskom on the JSE, or using some of the R6-trillion pension fund money, which Matona says is "underinvested in infrastructure".

But Matona apparently favours the option of putting more pressure on consumers.

"Eskom will systematically be bankrupt if it is not able to recover its full costs in the price of electricity. That is a clear policy decision that needs to be implemented."

Consumers should be paying more, he insists.

"You can see from the consumption behaviour of South Africans that the price is still low."

On the issue of listing Eskom, Matona says that while "there is a recognition within government that we do need to get private finance into Eskom", it shouldn't necessarily be done by privatising Eskom.

"We recognise the limits of the fiscus in funding Eskom, [but] we have not yet arrived at what would be the optimum model."

Game Changer

Of course, the real game changer would be allowing independent power producers to sell power to the national grid, which could then be distributed to households. But this can only happen with a level playing field. Eskom, as both producer and sole purchaser of power for the grid, has been blocking attempts to make it a fair and competitive process.

"Legislation has to be in place for that to happen", says Matona.

In fact, that legislation was drawn up five years ago, but never implemented.

President Jacob Zuma said in his state of the nation address five years ago that the Independent System and Market Operator Bill must be promulgated urgently. He said exactly the same thing this year.

Matona denies that Eskom has been blocking it, but says if it is passed in its present form, it will "complicate things" for the utility.

"IPPs are being connected to the grid, we need them."

But only on Eskom's terms, apparently.

He concedes that "the status quo is untenable", but says before the bill is promulgated "we first need to be clear what the impact will be on Eskom, on the country, on security of supply".

"Clearly the future industry is one where Eskom will have to play with other players."

Meanwhile, buy candles.