The Nelson Mandela Bay Business Chamber has asked energy regulator Nersa to stop the roll-out of new independent power producers (IPPs) due to their “catastrophic impact” on Eskom, and to investigate and renegotiate all existing contracts with IPPs.
The chamber represents about 700 businesses and has been very active in fighting for affordable electricity tariffs at Eskom and municipal level. Nelson Mandela Bay is an industrial hub that consumes about 1.5% of national electricity consumption.
The chamber’s David Mertens told Moneyweb the organisation has nothing against the principle of introducing renewable energy or IPPs, but that the numbers as set out in Eskom’s tariff application “stink”.
The chamber made the call to Nersa in its written submission in response to Eskom’s application to recover revenue totaling R762 billion over the next three financial years from electricity users through increased tariffs.
Eskom is asking for a 15% tariff increase annually from next year to 2021/22. This is over and above an increase of more than 4% Nersa has already granted Eskom for next year in relation to earlier expenses.
Nersa will travel the country in January for public hearings regarding Eskom’s application and the chamber expects to make a presentation during these proceedings.
The IPPs were negotiated by the department of energy and Eskom was obliged to sign an off-take agreement with each of them. The duration of the contracts is mostly for 20 years.
‘Detrimental impact on Eskom’
Former acting Eskom CEO Matshela Koko refused to sign further power purchase agreements with IPPs