Special rates apply to 5% of power

Parliamnet - Eskom's long-term special rate contracts with companies account for "approximately 5%" of the total electricity consumption in South Africa, Public Enterprises Minister Barbara Hogan has said.

"These long-term contracts account for approximately 5% of the total electricity usage in the country," she responded to a written question in Parliament by the Independent Democrats.

Hogan said only two companies benefited from special rates set in the long-standing contracts which have become controversial for adding to Eskom's losses and supply constraints, but again refused to name them.

The minister said this was "confidential commercial information of a third party and is subject to the protection provided in terms of the Promotion of Access to Information Act".

The ID's energy spokesperson Lance Greyling said neither the contracts, which date from the early 1990s, nor the secrecy surrounding them could be tolerated any longer.

"I was given the impression by Eskom's briefing to Parliament that they account for 10% of consumption. Whether it is 10%, or 5%, that is our reserve margin.

"Cancel the contracts and that is our electricity crisis at an end."

Greyling said it was untenable to have a national energy regulator to police the situation of having a monopoly on energy supply, but then allow Eskom to have secret deals with international companies.

There was an outcry last year after it emerged that Eskom's R9.5bn book value loss was to blame on the derivative-based tariffs at which it supplied power to mining giant BHP Billiton's Hillside and Mozal aluminium smelters.

The tariff was partly linked to the aluminium price that nosedived during the global economic meltdown, Eskom said this month that BHP Billiton had agreed to renegotiate its contract.

- Sapa