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Eskom, Busa team up to ask for more money

Johannesburg - Eskom and Business Unity South Africa (Busa) plans to ask the government to try and find additional funding for Eskom, Die Burger reported on Friday.

Eskom introduced load shedding last week, to prevent a collapse of the national power grid due to coal supplies for electricity generators which were wet.

Busa met with Eskom on Thursday to discuss ways of preventing a continuation of last week's energy crisis, which forced Eskom to impose load shedding.

The possibility of further electricity price hikes to obtain the additional funding was mentioned at the meeting, according to Busa CEO Cas Coovadia.

That would have to be considered if no additional funding could be obtained from Treasury.

Coovadia said there are regulatory problems, which hinders Eskom and the right level of increased tariffs would have to be determined if that is the solution.

Should load shedding be on the cards, however, then the right frame of mind must be adopted to handle the situation, said Eskom CEO Brian Dames.

Coovadia said it would be important to determine jointly which portion of load shedding municipalities would have to bear and which portion the industrial sector would have to bear.

In 2013 the National Energy Regulator of SA (Nersa) approved tariff hikes of 8% per year for five years.

Eskom says these increases are too little to enable it to buy electricity from independent energy generators in order to enlarge its reserve capacity.

Neither does it enable Eskom to buy back electricity from large energy consumers.

Debt owed by municipalities

Eskom was owed more than R2.3bn by various municipalities, according to the civil rights organisation AfriForum.

The organisation said this outstanding debt adds to SA's electricity woes.

AfriForum called for electricity management to be privatised.

The DA's Helen Zille said the present energy crisis could have been avoided.

"For several years South Africa has been told that excessive electricity price increases were necessary precisely to avoid further blackouts," said Zille.

"There is a further 8% average increase in electricity prices scheduled for 1 April 2014. While Eskom and government do not deliver on their mandate, consumers have no option but to pay ever higher electricity prices."

She also wanted to probe Eskom executives' performance bonuses.

The impact of the energy crisis over the past six years has been so big that the country is no longer seen as the place to invest in Africa, economist Mike Schüssler of economists.co.za told Fin24.

He said in conjunction with strikes, load shedding could cause economic growth of under 2% if it had to continue for more than a week.

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