QUESTIONS OVER ESKOM'S POWER PRICE HIKE HEARINGS KICKER

The South African branch of the WWF has raised questions about the integrity of the National Energy Regulator of South Africa’s (Nersa) public hearings into Eskom’s proposed electricity price hikes.

Richard Worthington, Manager of WWF’s Climate Change programme, said the nation-wide Nersa hearings, currently in their second week, were designed to allow the public to make comments on Eskom’s proposed 35 percent-a-year tariff increase for the next three years.

“Originally Eskom asked for a 45 percent increase, but then, after deciding to delay the building of Kusile power station to reduce costs and putting renewable energy projects on hold, Eskom reduced this to a 35 percent increase.

“In the meantime, the Government Gazette publishes a decree on December 31 which says Kusile will be built according to original plans and schedules. So what are we having public hearings for? If the Energy Minister (Dipuo Peters) has already decreed in the Government Gazette the nature and timing of new energy generation to be installed over the next five years, this takes away the prospect of meaningful public input into Eskom’s proposed tariff increase application,” Mr. Worthington said.

WWF said Min. Peters’s three-page document called itself an integrated resource plan, but was a “pathetic” document.

“It is ludicrous to call this an integrated resource plan. What were the minister’s intentions in publishing this? Was it an attempt to get something out before the year end, in an attempt to comply with the Energy Act? If so, it in no way meets the requirements of the act, and is a particularly inept attempt to do so,” Mr.Worthington said.

WWF recognised that building more energy supply would increase electricity costs, but said that if this new energy came from independent, green power producers, it would result in a significantly smaller tariff increases than Eskom is currently requesting.

A combination of industrial processes, wind and solar power generation, which would provide the equivalent amount of energy of Medupi and Kusile combined, would raise the price of electricity from 33c/kWh to 58c/kWh, instead of the 82c/kWh that Eskom is asking for by 2012, WWF said in a statement.

These costs would be fixed through power purchase agreements for 20 years, while Eskom has warned that it may still come back to the regulator in later years to request more tariff increases, the statement said.

Source: www.thestar.co.za, 20100118

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