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EIUG notes concern about Eskom`s operational

EIUG notes concern about Eskom`s operational
Mining News Pro - The Electricity Intensive Users Group of Southern Africa (EIUG) says it remains concerned about the operational and financial performance of power utility Eskom.

This comes as Eskom on Monday reported an interim profit of R83-million, but warned of a full-year loss of R22.1-billion.

"The EIUG has noted the slight improvement in Eskom`s operational performance as a welcome effort towards supply reliability, with the energy availability factor (EAF) having increased to 67.9% from 66.6% in March but it is still lower than the September 2019 figure of 69.9%.

"This availability is on the backdrop of improved planned capability loss factor and unplanned capability loss factor, which are both better than March and September 2019. Of significant concern though is that for the six months to September, the country was subjected to 19 days of load-shedding accompanied by high diesel use, increasing Eskom’s primary energy costs.

"This is despite an electricity consumption decline of 10.3% for the same period," the group notes.

It adds that the 10.3% decrease in consumption is unprecedented, especially when considering the industrial sales decline of 17.6%, mainly owing to the Covid-19-related hard lockdown.

"The industrial users are significant contributors to both gross domestic product and employment in addition to the base load consumption they provide which Eskom also needs. It is for these reasons that the EIUG calls for industrial tariffs that will improve overall industrial competitiveness while we welcome the NPAs as temporary measures to assist large industrial power users.

"We also support Eskom’s call for truly cost-reflective tariffs which are introduced at a pace the economy can afford and we are committed in working with Eskom in establishing a price path that is acceptable to all.

"The EIUG also concurs with Eskom that this year’s sales decline, projected at 8% by year-end, cannot be expected to be clawed back from the customers through the Regulatory Clearing Account. We, however, encourage Eskom to embark on a programme to minimise the decline by promoting and incentivising sales," it states.

The group is further calling for more stringent cost controls and increased efforts by Eskom to collect revenue.

"Municipal debt has increased by 17% to R32.9-billion since March, irregular expenditure continues to increase. It is imperative that the government and Eskom find an urgent and permanent solution to the municipal debt problem, the protracted discussions starting with the Inter-Ministerial Task Team at the beginning of 2017 to the current Eskom Political Task Team do not seem to provide a resolution to the problem as the debt continues to grow at an alarming rate," the EIUG notes.

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