File picture: Cindy Waxa
JOHANNESBURG - The Energy Intensive User Group (EIUG) of Southern Africa has called for stability in the country’s electricity price path, saying the uncertainty hinders planning for investments.

It said price volatility was not good for industry and contributed to a slowdown in production. “Without a clear price path, our members cannot plan for the future, because they do not know how much electricity will cost in the future,” EIUG chief executive Xolani Mbanga said. EIUG members account for 40 percent of the electricity consumed in South Africa.

The calls come as the National Energy Regulator of South Africa (Nersa) begins hearings on Eskom’s regulating clearing account (RCA) for the 2014/15 to 2016/17 period between April 16 and May 11.

Eskom wants to recover R19.2billion in the 2014/15 financial year, R23.6bn in 2015/16 and R23.9bn in 2016/17. In 2014/15, Eskom wants to recover R10.5bn for primary energy, R8bn in 2015/16 and R2.6bn in 2016/17. EIUG said it had scrutinised Eskom’s RCA application and felt that the power utility should be given R40bn or the R65bn requested.

It said Nersa should find the balance between what should be allowed to maintain Eskom’s liquidity and what could be absorbed by the market without seriously impeding economic growth or causing job losses. Nersa should verify claims made by Eskom for the over expenditure on primary energy, international purchases and independent power producers costs.

Mabanga said a number of factors within Eskom’s control led to the requirement for higher tariffs. EIUG said Eskom should reduce costs in coal purchasing and handling, water usage and treatment.