Tag: NERSA

Shocking energy price hikes for SA

Many middle-class families will be pushed back into poverty

As from today, Johannesburg residents will pay 7% more for electricity.

Ten other municipalities, including Cape Town, asked National Energy Regulator of SA (Nersa) for increases ranging between 7.63% and 12.11%.

Cape Town’s proposed 7.63% electricity increase would compensate for a fall in its energy sales but additional funds would be needed for the implementation of the city’s new electrification programme.

The price increases are intended to protect revenue, cover high distribution losses, fund a smart metering pilot project, and contribute to costs of electricity infrastructure maintenance and improvement.

The power price increases are part of a slew of other hikes .

Tomorrow the price of petrol will increase by 20c/l , bringing the cost of petrol to a near record high of R14.30/l. The price of diesel will increase by 13c /l to R12.90/l.

Gautrain and Metrorail users are to be hit with fare increases.

Metrorail one-way tickets will go up by 50c today; return tickets by R1. The cost of a weekly ticket will increase by between R3 and R7 and monthly tickets will increase by between R7 and R30.

Dawie Roodt, an independent economist with the Efficient Group, said more petrol-price hikes can be expected in the next few months as the rand is expected to depreciate further and the price of crude oil is poised to rise.

The writing is on the wall for many middle-class families who have only recently escaped from dire poverty. Many will be pushed back into poverty.

 

Why SA pays more for power

The reason why theSouth African consumer has to pay more for electricity, lies with the corrupt dealings between the Chamber of Mines and BHP Billiton.

About BHP Biliton’s power contracts with Eskom, Xolani Mkhwanazi warnes that BHP Biliton “expects  contracts to be honoured”. Mkhwanazi also happens to be chairman of BHP Biliton SA.

The same Mkhwanazi was CEO of the National Energy Regulator.

Mr Chris Yelland has pointed out that some of the BHP power contracts had to be approved by this National Energy Regulator as required by law. The NER was established in 1995. The NER was the legal predecessor of the 2004 NERSA.

Xolani Mkhwanazi was the CEO of NER from 1999 till 2004. During this time period the NER would have approved the extensions from 2020 to 2028 of the Hillside 1 and II power contracts. At the time 2020-2028 was so far into the future, that the extensions were irrational. Would Mkhwanazi in his honest mind claim that by 2020, South-Africa would still not be utilising Eskom’s surplus capacity of 2000?

Also during same time period Mozal I and Mozal II smelters in Mozambique were approved by the NER. By then there was already a huge surplus capacity of primary aluminium ingot smelting for off-take by the local industry. Thus the long term Mozal power contracts were irrational too.

Readers must not forget: all of BHP Biliton’s aluminium smelters at Southern African ports import all of their ore from BHP-bauxite mines in Australia on the other side of the globe. South-Africa has the bulk of the worlds chrome ore, none of its aluminium ore. South-Africa also produces its own reducdant for ferrochrome smelting. All reductant for all of BHP’s import aluminium ore is imported, mostly from the USA.

How come then Mkhwanazi, former CEO of the NER, approving unique power contracts between Eskom en BHP Biliton, later CEO of BHP Billiton Aluminium South-Africa, now chairman of BHP Billiton SA, is also chairman of the South-African Chamber of Mines? With the hundreds of thousands of tons of imported aluminum ore per annum, Mkhwanazi should have been chairman of Australia’s Chamber of Mines.

Eskom has asked NERSA to review the BHP Biliton power contracts. Within 2 months, NERSA will hold public hearings in this regard. The NER as legal predecessor of NERSA, who had approved these controversial contracts will come into the spotlight. So will the chairman of BHP Biliton SA, Xolani Mkhwanazi’s former position as CEO of the NER, during the time period when most of these controversial contracts and their irrational extensions were approved by the NER.

Jacob Mouw